Price action: Corn futures closed mostly 2 to 5 cents lower, which was near session lows.
Fundamental analysis: Quiet, pre-report trade was seen throughout today's session as traders await USDA's Crop Production and Supply & Demand Reports in the morning. Traders aren't expecting any major changes, but also weren't willing to add fresh positions ahead of the data.
Weekly export corn sales were disappointing at 157,600 MT for 2012-13 and 51,800 MT for 2013-14. While a daily sale of 152,400 MT was announced to Mexico for 2013-14, there continue to be signs that high prices are slowing use.
Technical analysis: December corn futures posted an inside day of trade today and remain near the middle of the range from the September low of $7.05 to the October high of $7.76.
Hedgers: 100% sold on 2012-crop in the cash market -- 90% for harvest delivery; 10% for March 2013 delivery. Also, Dec. $6.50 put options, which were purchased on 40% of 2012-crop for 31 1/2 cents, are held as a crop insurance hedge.
Cash-only marketers: 75% sold on 2012-crop -- 50% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery.
Price action: Soybean futures posted losses for the day and softened into the close to end roughly 4 to 11 cents lower for the day.
Fundamental analysis: Dollar strength and negative outside markets gave traders additional incentive to reduce risk ahead of what is expected to be a mildly bearish USDA report tomorrow. Traders expect USDA will raise its production estimate 31 million bu. to 2.891 billion bu. and that it will raise carryover by 3 million bu. to a still-tight 133 million bushels.
Adding to the negative tone, Conab reminded the market it expects record-large production and weekly soybean export sales saw a marked slowdown from recent weeks. Nevertheless, the export pace remains well above what is needed to match USDA's export projection.
Technical analysis: January soybean futures continued in their November downtrend toward support at the October low of $14.84. A move through this level would open significant downside risk. Near-term resistance stands at the October high of $15.77.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery.
Price action: Wheat futures faced pressure early in the session, but this gave way to bargain buying that propelled the market to a mostly firmer close. Chicago wheat ended around 4 to 8 cents higher and Kansas City saw slightly lighter gains. Minneapolis wheat ended narrowly mixed.
Fundamental analysis: Bulls had the advantage most of the day thanks to fresh signs global wheat supplies are tightening. The Food and Agriculture Organization of the United Nation lowered its global wheat crop projection by 2.8 MMT to 661.2 MMT. Drought in the U.S. Southern and Central Plains is worsening, which doesn't bode well for a crop already rated well below year-ago levels. Plus, there is flooding in Australia and Black Sea supplies are dwindling.
However, buying interest will be capped until U.S. wheat finally sees a boost in export demand due to tighter supplies. Today's disappointing weekly export sales tally signals this has not yet occurred.
Action in the wheat market tomorrow will likely be driven by USDA report data. It is expected to raise wheat carryover slightly; adjustments to the corn balance sheet will be just as influential.
Technical analysis: December Chicago wheat futures ended just below downtrending support drawn off the highs since July, which intersects around $9.09 tomorrow. Support is layered from last week's low of $8.52 3/4 to the October low of $8.40 1/4.
Hedgers: 75% cash sold on 2012-crop in the cash market.
Cash-only marketers: 75% of 2012-crop production is sold.
Price action: Cotton futures finished 57 to 104 points lower, which was a low-range close.
Fundamental analysis: Cotton futures were pressured by mild strength in the U.S. dollar index today. Macro-economic concerns and bearish fundamentals are causing traders to lighten long positions, but selling interest has been relatively limited this week as traders are waiting on USDA's updated crop estimate and carryover projection tomorrow morning.
Technical analysis: December cotton futures violated the July low at 69.40 cents today, making the June 28 low at 67.16 cents next support. Contract-low support is at 64.61 cents.
Hedgers: 50% priced on expected 2012-crop production via cash forward contract for harvest delivery. A breakout from that range is needed to spark a trending move.
Cash-only marketers: 50% priced on expected 2012-crop production via forward contract for harvest delivery.