Price action: Corn futures saw a quiet day of trade and ended fractionally to a 1 1/2 cents weaker for the day.
Fundamental outlook: Traders learned that China has reportedly bought 300,000 MT of U.S. corn. But countering this is recognition that harvest is a long ways from the halfway completion point and early yield results have impressed. These conflicting data points resulted in a wash for the market today.
The forecast for the next two weeks is favorable for harvest progression. Until half the crop is in the bin, hedge-related pressure will likely continue to make it difficult for the corn market to find buying interest. The bearish technical posture of the market adds to this struggle.
Technical outlook: December corn futures closed near opening levels and just off Tuesday's close as the market is consolidating amid a lack of official government data. Tough support remains at Monday's three-year low of $4.32. The psychological $5.00 level is resistance, followed by the August high of $5.08 1/4.
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 ended 7 1/2 to 9 1/2 cents higher through the March contract. Farther-deferred futures closed mostly 4 to 6 cents higher.
Fundamental outlook: Soybean futures were supported by strong gains in the soyoil market. Soyoil traders continued to react to yesterday's lower-than-expected soyoil stocks figure in the monthly NOPA crush report by covering short positions and unwinding long meal/short soyoil spreads. The buying in soyoil triggered short-covering in the soybean market.
Also supportive for soybean futures today was talk Gulf exporters are short on soybean supplies to fill fall export commitments. If that's the case, there will be a bigger push to buy new-crop supplies from farmers. So far, the flow of new-crop beans to market has been relatively light.
Funds were also relatively active on the long side of the soybean market today. Funds bought 6,000 contracts (30 million bu) of soybeans on the day.
Technical outlook: November soybean futures spiked the Oct. 1 low of $12.63 1/2 on Monday, but failed to find followthrough selling below that level and have bounced. To signal a low is in the works, the contract must push above last week's high at $13.05 3/4 and likely needs to push above the June high at $13.33.
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.
Advice: Hedgers and cash-only marketers should make a 25% 2013-crop cash sale, pushing hedgers to 75% sold in the cash market and cash-only marketers to 50% priced.
Price action: Wheat futures fell with HRW leading the slump. Futures finished near the day's lows. HRW closed down 6 1/2 to 11 1/2 cents. HRS closed down 6 1/4 to 8 cents. SRW closed down 4 1/4 to 5 cents.
Fundamental outlook: Wheat futures opened weaker on improved soil conditions for seeding of the winter wheat crop in the Central and Southern Plains. While some export rumors circulated, news on the export front has declined, which is concerning for traders. News the Senate had reached an agreement on a bill to reopen the government and lift the debt limit saw the U.S. dollar index reverse course and surge higher, which added selling pressure to wheat futures. However, when the U.S. dollar index weakened in late trading, wheat futures did not respond.
Technical outlook: Today's downturn signals bulls are losing their advantage. The sharp break in December HRW futures penetrated support and plunged through the two-week sideways trading range. That action makes the recent trading range appear to be a distribution top. Support rests near $7.23 with $7.50 providing overhead resistance.
December SRW futures penetrated support at last week's low at $6.82 1/4, making that resistance. There is support at $6.75 and $6.62 1/2.
Hedgers: NEW ADVICE: Make a 25% 2013-crop cash sale to get to 75% sold in the cash market. No 2014-crop sales are advised at this time.
Cash-only marketers: NEW ADVICE: Make a 25% 2013-crop sale to get to 50% sold. No 2014-crop sales are advised at this time.
Price action: Cotton futures briefly traded firmer, but saw losses extend into the close. Futures ended 16 to 51 points lower, with nearbys leading losses.
Fundamental outlook: A lack of fresh news and building harvest-related hedge pressure once again weighed on cotton futures. Although weather is still a factor that is raising concern about crop quality, traders' focus is on the lack of information from the government and expectations demand is lackluster.
The China Cotton Association says the country imported just 201,300 MT of cotton in September, a 27% reduction from the previous month and down 23.4% from year-ago. It reports year-to-date imports of 3.23 MMT, down 19.9% from year-ago.
Technical outlook: December cotton futures posted a downside day of trade on the chart and violated support to post a month low of 82.93 cents. The contract came off the low into the close, but followthrough pressure tomorrow would make bears' next target 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.