Price action: Bears again had the advantage in the corn market and futures ended 3 3/4 to 4 1/4 cents lower on the day, which was just off session lows.
Fundamental analysis: Expectations USDA will raise its corn production estimate by 179 million bu. from September to 14.022 billion bu. gave bears a slight advantage in the corn market today. But generally speaking, both buying and selling interest is on hold ahead of Friday's reports as uncertainty is high. Plus, higher production has been expected for some time as yield reports throughout harvest have generally been "better than expected."
Meanwhile, recent export sales announcements and Gulf basis strength signals lower corn prices are rebuilding demand. Basis levels at interior locations have also firmed as Midwest precip has slowed harvest and many producers have opted to store supplies.
Technically speaking, December corn is oversold according to the Relative Strength Index, but again, efforts to correct this will likely remain limited until after Friday's reports.
Technical analysis: December corn futures forged yet another three-year low today. Support is tightly layered from the February 2010 low of $4.16 to the contract low at $3.98 1/4. The contract must first move back above the $4.50 area to signal a short-term low is in the works.
Hedgers: 25% of 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 settled between 3 1/4 and 5 1/4 cents higher today, which was mid-range for most contracts.
Fundamental analysis: Soybean futures were supported by mild short-covering amid ideas recent losses have been overdone. But with traders expecting USDA to raise its crop estimate and carryover projection Friday, buying interest was limited. That's likely to be the case again tomorrow unless there's bullish demand news in the weekly export sales data.
There were some rumblings that China may be shopping around for U.S. soybeans. Given recent price pressure and China's need for soybeans, that wouldn't be a surprise, but fresh demand could help the market find a short-term low. An improvement in soybean basis also suggests fresh demand news is possible, though there wasn't enough basis strength today to signal a major purchase.
Technical analysis: After the drop through support late last week, January soybeans are consolidating around last Friday's lows. While this could signal a short-term low is in the works, such price action typically indicates the contract is pausing before making the next move in the established pattern -- in this case, lower.
Hedgers: Get to 100% sold in the cash market on 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on 2013-crop production.
Price action: SRW wheat futures closed 2 to 4 cents lower, while HRW futures ended mostly 5 to 7 cents lower and HRS futures finished 1 to 2 cents lower.
Fundamental analysis: Wheat futures were pressured by spillover from the corn market, a lack of bullish export demand news and favorable growing conditions for the U.S. winter wheat crop. While Friday's Supply & Demand Report from USDA is expected to show a lower ending stocks forecast, traders thus far have been reluctant to cover short positions, signaling attitudes are growing increasingly negative.
Egypt's latest wheat tender resulted in the country buying 60,000 MT of Romanian supplies. No bids for U.S. wheat were extended, suggesting U.S. supplies are currently not competitively priced on the global market despite the recent rollover in futures.
Technical analysis: December SRW wheat futures have now closed lower for three consecutive days and nine out of the last 11 trading session, with the two "up" days each being gains of 1/4 cent. With the contract having retraced more than 75% of the rally from the September low to the October high, all signs point toward a near-term test of the contract low at $6.35 1/2. To signal a short-term low is in place, the contract must close above $6.76 1/2.
Hedgers: 75% sold on 2013-crop in the cash market. No 2014-crop sales are advised.
Cash-only marketers: 50% sold on 2013-crop. No 2014-crop sales are advised at this time.
Advice: Hedgers were advised to claim profits on the 50% 2013-crop hedges held in Dec. cotton futures. Our exit was at 77.66 cents for a profit of 6.21 cents.
Price action: Cotton futures surged this morning, but the market backed well off its highs for a mid-range finish. Futures closed 84 to 116 points higher on the day, with nearby contracts leading gains.
Fundamental analysis: Traders in the cotton market actively covered short positions today in anticipation of USDA's Crop Production and Supply & Demand Reports Friday. While the report is expected to be neutral to slightly bearish, the cancellation of the October report means there is a lot of uncertainty as to what the reports will hold.
Weakness in the U.S. dollar index added incentive for traders to cover short positions and correct the oversold condition of the market. But as the market neared near-term resistance levels, some profit-taking ensued.
Technical analysis: December cotton futures came within six points of the psychological 79.00 cents level and the contract is still oversold according to the 14-day Relative Strength Index. This signals more corrective trade may be warranted, with additional resistance standing at 80.00 cents. Yesterday's dip to a 2013 low of 75.27 cents marks solid near-term support.
Hedgers: NEW ADVICE Claim profits on the 50% 2013-crop hedges held in Dec. cotton futures. Our exit was at 77.66 cents for a profit of 6.21 cents. 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.