Price action: Corn futures ended lower in the September through July 2013 contracts, while far-deferred months posted slight gains. Futures ended well off today's lows.
Fundamental analysis: Corn futures faced corrective selling, which at times was heavy today. But despite forecasts calling for better rain chances the next several days and midday weather models suggesting cooler, wetter conditions are likely during the second half of the 15-day window, futures closed well off session lows and avoided chart damage. Traders realize that rains now would be too late for much of the corn crop as irreversible damage has been done. Still, it's hard for futures to continue to charge higher if rains are in the outlook.
How traders respond to crop condition ratings this afternoon should indicate whether they intend to build more premium into prices or if a top is in the works. While crop prospects continue to fade, weather rallies often end well before full yield loss is realized.
Technical analysis: December corn futures faded after posting a new contract high of $8.00 overnight. But the contract avoided a key bearish reversal with a mid-range close.
Hedgers: 40% of expected 2012-crop production is covered in Dec. $6.50 put options for 31 1/2 cents. 35% cash forward sold on expected 2012-crop production -- 25% for harvest delivery; 10% for March 2013 delivery. 90% sold on old-crop in the cash market.
Cash-only marketers: 90% sold on old-crop. 35% forward priced on expected 2012-crop production -- 10% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery.
Price action: Soybean futures softened as the day progressed and ended low-range with losses in the 50- to 60-cent range through the March 2013 contract. Soymeal also faced heavy pressure, while soyoil ended midrange with moderate losses.
Fundamental analysis: Early profit-taking pressure on soybean futures triggered sell stops, pushing the November contract as much as its 70-cent daily limit lower today. The heavy sales were brought on by a wetter forecast and strong gains in the US dollar index this morning.
Rains are expected for the Midwest over the next three to four days, especially in areas north of I-80. A major rain event could improve soybean yield prospects significantly as the crop is into its stage. But if the forecast disappoints, the market could quickly turn higher as temps are expected to remain above-normal and the global appetite for soybeans remains strong.
Technical analysis: November soybeans posted a bearish reversal today, trading up to a new contract high of $16.91 1/2 overnight, which is new resistance, before falling to within about about 20 cents of psychological support at $16.00.
Hedgers: 25% of expected 2012-crop production is covered in Nov. $14.00 put options for 42 3/8 cents. 50% of expected 2012-crop production is sold via cash forward contract for harvest delivery. 90% sold on old-crop in the cash market.
Cash-only marketers: 85% sold on old-crop. 50% sold on expected 2012- crop production via forward contract for harvest delivery.
Price action: The September and December wheat contracts at all locations posted losses in the 20- to 30-cent range. Deferred contracts saw losses ranging from around a nickel to the mid-teens, depending on location.
Fundamental analysis: Heavy losses in the soybean market and the corn market at times today, along with strength in the US dollar index kept pressure on wheat for most of today's session. Some far-deferred contracts benefited from light short-covering at times today when corn moved off its lows and the dollar off its highs, but bears had the upper hand.
While the market was again reminded of wheat crop concerns in the Black Sea region today, buying interest was limited by still-ample world supplies and solid spring wheat conditions. For this reason, wheat needs support from corn to rally -- a lack thereof left the market vulnerable to profit-taking today.
Technical analysis: September Chicago wheat futures forged a new 2012 high of $9.47 1/4 overnight, but it sharply reversed course and posted a bearish reversal for the day. Support lies at the psychological $9.00 level, followed by the August 2011 high of $8.53 1/2.
Hedgers: 75% cash sold on 2012-crop for harvest delivery. 100% sold on 2011-crop in the cash market.
Cash-only marketers: 75% of 2012-crop production is sold for harvest delivery. 100% sold on 2011-crop.
Price action: Cotton futures closed 55 to 84 cents lower after a relatively quiet day of trade.
Fundamental analysis: Given sharp pressure on grain and soy futures and negative outside markets, cotton futures didn't perform too poorly today. Helping offset those negatives were concerns with the Indian crop as monsoon rains have been slow to arrive and seasonal rainfall in the country remains well below normal. That points to lower (potentially much lower) production and less competition for U.S. cotton on the global market. But with global cotton supplies building year-over-year, it was only enough to limit selling.
Technical analysis: December cotton futures continue to chop sideways in the established range from the contract low at 64.61 cents to the June high at 74.80 cents.
Hedgers: 100% sold on old-crop in the cash market. 50% priced on expected new-crop production via cash forward contract for harvest delivery.
Cash-only marketers:100% sold on old-crop. 50% priced on expected new-crop production via forward contract for harvest delivery.