Price action: Corn futures did not stray far from unchanged today and ended 1/2 cent higher in the March and April contracts and 1/2 to 1 1/2 cents lower in deferreds.
Fundamental outlook: Early support for the corn market came from yet another week of stronger-than-expected weekly corn export sales. Sales of nearly 1.270 MMT for 2013-14 and 71,000 MT for 2014-15 were strong, but strong demand is no longer "news," especially since carryover levels are now seen as plentiful. A weaker U.S. dollar index was also supportive in the early going. Light support also came from news the Argentine grain exchange estimated its corn crop at 23.5 MMT, which would be down 3.5 MMT from year-ago.
But some momentum shifted to market bears due to USDA's long-term ag projection that called for corn plantings of 93.5 million acres in 2014-15 for a 14.26-billion-bu. crop and plentiful ending stocks in excess of 2.6 billion bushels (see "Evening Report" for more).
Technical outlook: March corn futures again found support at former resistance of $4.40 today, though the market was again unable to post an upside move to remain in the week-long consolidation range. Initial resistance is at $4.50.
Hedgers: 60% sold in the cash market on 2013-crop. 20% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Cash-only marketers: 50% sold in the cash market on 2013-crop. 20% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Advice: Cash-only marketers are advised to make a 15% 2013-crop sale to get to 90% priced on old-crop.
Price action: Nearby soybean futures posted a high-range close with gains of 16 3/4 to 21 1/4 cents. September and the rest of the deferred market closed 12 to 15 cents higher. Meal and soyoil saw sharp spillover buying.
Fundamental outlook: A combination of dollar weakness, technically based buying and continued demand for old-crop soybeans lifted futures today. While this morning's weekly export sales data showed a dramatic slowing of demand during China's Lunar New Year holiday, the country was still noted as a buyer of old- and new-crop soybeans during the reporting period. Additionally, exports of 1.494 MMT were impressive.
Buying in new-crop futures was limited by a reminder of the likelihood soybean acres will be up from year-ago in the U.S. in 2014. See "Evening Report " for long-term baseline projection details from USDA.
Technical outlook: March soybean futures moved to its highest level since mid-September, making bulls' next objective the contract-high of $13.77 3/4. November beans also posted an upside day of trade on the charts and closed above the mid-January high of $11.29. A weekly high close would be a positive sign for new-crop futures heading into next week.
Hedgers: 100% sold in the cash market on 2013-crop production. 10% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Cash-only marketers: NEW ADVICE: Make a 15% 2013-crop sale to get to 90% priced on old-crop. 10% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Price action: Wheat futures enjoyed spillover from soybeans and weakness in the dollar index, helping the market extend gains into the close for a strong finish. All wheat flavors ended mostly 6 to 7 cents higher, with March HRW ending 9 3/4 cents higher and March SRW up 8 1/2 cents.
Fundamental outlook: This morning's weekly export sales data didn't surprise the market, but the fact that sales came within traders' expectations was encouraging, as it helped to sustain spillover buying from soybeans. Additionally, traders say recent sharp dollar weakness bodes well for U.S. wheat export business.
Traders are also keeping an eye on the weather, especially with state crop reports noting the HRW crop deteriorated through the winter. The extended forecast calls for below-normal precip across the southern third of the U.S., which maintains concerns about drought as the winter crop comes out of dormancy this spring.
Technical outlook: March SRW futures briefly traded below yesterday's low but that served as a springboard for a test of resistance at yesterday's high of $5.98 1/4. Today's high-range close bodes well for bulls heading into overnight trade. A new weekly high could trigger buy stops that may lie around the $6.00 level.
Hedgers: 100% sold on 2013-crop in the cash market. 35% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 75% sold on old-crop. 35% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Price action: Cotton futures traded in a wide range again today, and futures ultimately ended narrowly mixed and around mid-range for the day.
Fundamental outlook: Cotton future initially responded positively to this morning's Weekly Export Sales Report. While cotton exports of 120,300 RB for 2013-14 and 81,900 RB for the week ended Feb. 6 were below recent tallies, a strong showing was not expected as the data was for the week of the Chinese Lunar New Year celebration. Also, weekly exports of 336,600 RB were up 21% from the previous four-week average. Weakness in the U.S. dollar index and strong gains in soybeans and wheat added support.
But some profit-taking returned to the market after USDA issued its long-term ag baseline outlook that called for cotton production to rise to 15.6 million bales in 2014-15 on an increase in cotton acreage to 11 million.
Technical outlook: March cotton futures remain within the uptrend since November. Resistance is layered between the January high of 88.43 cents and the February high of 89.31 cents. Uptrending support intersects around 86.00 cents tomorrow.
Hedgers: 75% of 2013-crop is sold in the cash market. 25% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 75% of 2013-crop is sold. 25% of expected 2014-crop production is forward sold for harvest delivery.