Price action: Corn futures were firmer in overnight hours, but began to drift lower at the start of daytime trade. In the end, corn closed mostly around 5 1/4 cents lower, which was near session lows.
Fundamental outlook: Corn enjoyed short-covering support in overnight trade, but the lack of export sales data from USDA this morning and disappointment the Crop Production Report will not be released tomorrow led to some profit-taking.
Losses were extended by harvest progress and rumors the Environmental Protection Agency might lower its ethanol blending requirements. As we have previously reported, the agency has said meeting the requirements spelled out by law could be a challenge in 2014 and will depend upon the level of carryover renewable identification numbers (RINs) that are available from 2013 output. However, the rumored reduction would still be up from current output levels.
Technical outlook: December corn futures slipped to a fresh weekly low and now appear headed for a test of the October low of $4.35. Violation of that support would have bears targeting the $4.25 area. To signal a near-term low is in the works the contract needs to return above $4.62.
Hedgers: 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures favored a firmer tone throughout the day but closed mixed and near session lows. Meal ended lower and soyoil ended slightly higher amid spreading.
Fundamental outlook: Soybean futures posted solid gains overnight, softened with the start of daytime trade and saw some resurgence of buying ahead of noon CT before softening into the close. This back-and-forth price action is due to the lack of regular news flowing into the market. Not only are traders disappointed the market lacked another weekly export sales report, but they will also have to be patient (perhaps very patient) for the October Crop Production Report that was originally scheduled for tomorrow.
Expectations that farmers focused on soybean harvest this week also limited buying throughout the day. But despite this, basis across the country has held up fairly well, suggesting the market is hungry for new-crop supplies.
Technical outlook: November soybean futures briefly traded above $13.00 before profit-taking set in, signaling this as a tough level of resistance for the timebeing. Futures are currently working on weekly losses, which makes tomorrow's price action even more important. Weekly losses would set up a negative market tone heading into next week, while even just slight gains for the week would suggest bulls have the advantage.
Hedgers: Get to 100% sold in the cash market on expected 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on expected 2013-crop production.
Price action: Wheat futures traded on both sides of unchanged but ended on the defensive. SRW futures closed 5 to 7 1/2 cents lower and near their daily lows. HRW finished 3 to 4 cents lower. Nearby HRS wheat ended 1 to 2 cents lower, with deferreds mixed.
Fundamental outlook: Wheat futures were lower on news Egypt canceled its recent tender for at least 50,000 MT due to high prices. The cancellation raised concerns the recent runup in prices had resulted in U.S. wheat being priced out of the global market. Today's rise in the U.S. dollar index added to the selling pressure.
Meanwhile, the Buenos Aires Grains Exchange projected the Argentine wheat crop at 10.35 MT, up from last year's harvest but lower than USDA's estimate of 12 MT.
Technical outlook: December SRW futures have turned back on their attempt to penetrate resistance at $7.00. Futures have support at the October low of $6.72 1/2 and the fall uptrend line. HRW December futures are consolidating in a narrow trading range bracketed by $7.49 on the support side and $7.64 3/4 on the resistance side.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 25% of 2013-crop is sold.
Price action: Cotton futures posted sharp overnight gains, but buying interest dried up into the morning hours and futures finished steady to 20 points higher. The low-range close gives bears more momentum heading into the next session.
Fundamental outlook: Without fresh news for the market to digest, traders took advantage of early gains by taking profits. The market lacked fresh export sales news again today due to the government shutdown. Traders are also left without solid information on country basis levels, although the start of harvest leads to expectations that basis is softening.
Technical outlook: December cotton futures saw trade above the 84.00 cent level before profit-taking set in. The contract respected support at yesterday's low of 83.10 cents. Violation of that level would set the stage for a test of the September low of 82.11 cents.
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.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.