Price action: After a weaker start in overnight trade, corn futures firmed and extended gains in daytime trade. Corn ended 7 to 9 1/4 cents higher, with December leading gains.
Fundamental analysis: New-crop futures led the drive higher today as news of Mexico's purchase of 120,000 MT of new-crop corn turned the trade's heads. Given the recent strength of the dollar, traders are impressed with a pickup in new-crop corn business. Futures extended gains around midday as some private forecasters called for a return to above-normal temps over the Corn Belt next week. This caught traders' attention as current weather conditions have been viewed as favorable for crop development.
Technical analysis: The bulls are finding positives in today's upswing which saw the December contract close just above the key $5.00 level. However, momentum indicators remain negative and today's surge also featured traders taking profits feeling Friday's losses in short trade were possibly overdone. For now, today's low at $4.90 is initial support. A close above the May low of $5.12 is needed to begin signaling the recent downswing was a bear trap.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures started the overnight session with slight losses but buying picked up on short-covering. Gains were extended with the start of daytime trade and futures ended 20-plus cents higher for the day. Meal ended higher and soyoil was lower amid spreading and spillover from losses in crude oil futures.
Fundamental analysis: Ideas last week's losses were overdone triggered early short-covering, but gains were extended during daytime trade on news of a pickup in new-crop export business. USDA announced that an unknown buyer purchased 135,000 MT of soybeans and China purchased 120,000 MT -- all for 2013-14 -- to signal prices have reached value levels. This is especially impressive given recent strength in the dollar index (although the dollar was softer today).
Futures extended gains and private weather forecasters said midday weather models suggests a building heat dome would result in another bout of above-normal temps by next week. Meanwhile, temps across the Midwest are expected to return to closer to normal levels by midweek, but traders are more concerned about the extended outlooks, which have turned more unfavorable for crop development.
Technical analysis: November soybean futures posted a bullish reversal after a gap lower start to the day. The contract posted a 29-cent daily trading range and closed back above the psychological $12.50 level -- but still has a lot of work ahead in order to signal a near-term low has been posted.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 20% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Wheat futures favored a firmer tone throughout the day but ended mixed. Chicago wheat closed mostly 3 to 4 cents higher, with Kansas City and Minneapolis widely mixed.
Fundamental analysis: Wheat saw spillover from strength in the corn and soybean markets to start the day session, but softened in late trade as traders are still leery of rebuilding long positions due to uncertainty surrounding the corn and soybean crops.
On a positive note, USDA announced this morning that China purchased 840,000 MT SRW wheat for 2013-14. With the bulk of harvest-related hedge pressure likely behind the market, traders are beginning to talk about the possibility the market has posted a near-term low given the recent pickup in demand.
Technical analysis: Wheat still has a lot of work in order to confirm a low has been posted. September Chicago wheat needs to at least return above the June high of $7.24. Currently, the contract is hovering above contract-low support of $6.52 1/4.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop sale is sold. 100% sold on 2012-crop.
Price action: Cotton futures traded on both sides of Friday's range, expanding on Friday's range and finished slightly higher, with the exception of the October contract which closed fractionally lower. Most contracts posted mid-range closes.
Fundamental analysis: Continuing poor weather in major cotton growing regions tended to support new-crop futures today. While the eastern belt may receive some precipitation from hurricane Chantal, the critical southwestern cotton region remains hot and dry with little relief in the forecast.
Technical analysis: The December contract has tough resistance at the March high of 89.20 cents and support at the June low of 81.72 cents. Today's slight expansion in the trading range suggests a rise in volatility is ahead.
Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery. 100% sold on old-crop in the cash market.
Cash-only marketers: 85% sold on old-crop. 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.