Price action: Corn futures favored a weaker tone through the day but new-crop contracts came off session lows in late trade to close steady to mildly firmer in most contracts. Old-crop futures ended 7 3/4 to 9 1/2 cents lower.
Fundamental analysis: Early pressure was tied to confirmation of last week's strong corn planting surge, as 71% of the crop is now planted -- just 8 percentage points behind the average pace. But little planting progress is expected to be made in the Upper Midwest this week as a wet weather pattern has returned to the region (see "Evening Report" for more). That, along with bull spread unwinding, helped support the late recovery in new-crop futures.
Futures also enjoyed late-session short-covering on ideas prices are attracting fresh demand. Gulf corn basis improved 8 cents this morning to stand $1 above July futures and remained at that level through the day. This is also a reflection of tight supplies.
Technical analysis: July corn futures violated support at yesterday's low and posted a mid-range close to remain within the boundaries of the two-month consolidation range. December corn futures came within a penny of the June 2012 low of $5.11 and recovered to post a high-range close. But new-crop corn has a lot of work ahead in order to signal a near-term low has been posted.
Hedgers: 100% sold on 2012-crop in the cash market. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery
Cash-only marketers: 75% sold on 2012-crop production. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Advice: Cash-only marketers were advised this morning to make a 15% 2012-crop sale to get to 90% sold on old-crop.
Price action: July soybean futures closed 13 3/4 cents higher, the August contract was 3/4 cent lower and the other months were mostly 4 to 6 cents lower today.
Fundamental analysis: Tight supplies continue to support a rally in July soybean futures. But with the August contract not actively participating in the move higher today, that's a potential red flag the rally could be nearing an end.
Meanwhile, new-crop futures continue to chop sideways. While the strong rally in the lead-month contract isn't spurring active buying interest, it is limiting selling interest. Traders are still trying to sort out how many intended corn acres may get switched to soybeans. The rapid pickup in corn planting last week has reduced those expectations, but some traders still believe USDA understated soybean acres in the Prospective Plantings Report and there is still 29% of the corn crop left to seed with a wet near-term forecast.
Technical analysis: July soybean futures have moved to the upper end of the extended, choppy trading range, which has turned back multiple rally attempts since last fall. But today's close at $14.78 1/4 is the highest close since Sept. 28 of last year -- before the broad, sideways trading range was established -- signaling an upside breakout may be in the works. The February spike high at $14.83 1/2 is key near-term resistance. There is likely a pool of buy stops above that level.
Hedgers: 100% sold on 2012-crop in the cash market. 50% of expected 2013-crop production is hedged in November soybean futures at $12.19. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: NEW ADVICE: Make a 15% 2012-crop sale to get to 90% sold. 10% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Chicago and Kansas City wheat futures faced pressure for most of the day, but ended well off their lows with losses of 4 3/4 to 6 1/2 cents. Minneapolis wheat saw choppy trade and ended likewise, with July up 2 1/4 cents and deferred months mostly 2 cents lower.
Fundamental analysis: Spillover from corn and negative outside markets set the tone for the wheat market today. While USDA yesterday confirmed a still lagging spring wheat planting pace and ongoing deterioration of the HRW wheat crop, market action continues to signal that this is of little concern to traders for the time being as global supplies are expected to be ample. Areas of Ukraine and Russia recently received beneficial rains, as have the U.S. Central and Southern Plains.
Concerns about ongoing spring wheat planting delays in the Northern Plains due to recent and expected rains for the region did encourage some light short-covering interest in the Minneapolis market at times today.
Technical analysis: July Chicago wheat futures nearly matched yesterday's trading range. But today's slightly lower low signals a test of strong support at the April low of $6.64 3/4 is likely. Initial psychological resistance stands at $7.00, but the market needs closes back above the April high of $7.36 3/4 to signal a reversal is in the works.
Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.
Price action: Cotton futures came under heavy pressure today and ended low-range with losses of 108 to 176 points, with nearby contracts leading losses.
Fundamental analysis: Strength in the U.S. dollar index, a generally negative tone across the commodity sector and a reminder of slowed cotton demand from China pressured the cotton market today. This resulted in a downside gap for a number of contracts and a low-range close. In April, Chinese cotton imports fell 15% from year-ago to 430,867 MT and year-to-date imports are down 13.5% from that period the year-prior.
The market brushed off news that U.S. cotton planting continues to lag the normal 52% completion rate at this time by 13 percentage points. Recent rains in the South are seen as more supportive than worrisome and the market is more focused on the demand side of the equation at present.
Technical analysis: July and December cotton futures broke through near-term levels of support and appear headed for a test of the bottom of the markets' recent consolidated trading range at the April low of 82.84 cents for the July contract and at the May low of 82.92 cents for the December contract. A move through these levels would signal the market's recent rebound was nothing more than a correction to the downtrend from the March highs.
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. 100% sold on old-crop in the cash market.
Cash-only marketers: 85% sold on old-crop. 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.