Price action: Corn futures enjoyed gains throughout the day and ended high-range with gains around 4 cents through the July 2015 contract. Farther deferred months posted gains around 2 cents. Funds bought 6,000 corn contracts (30 million bu.) today.
Fundamental analysis: The corn market benefited from a reminder of strong demand for U.S. old-crop corn as well as ideas the downside was overdone yesterday. USDA's export sales for the week ended March 27 came in at 960,600 MT for 2013-14 and 37,900 MT for 2014-15. The overall tally met expectations and points to solid demand. Exports of nearly 1.426 MMT were also impressive.
The market also responded well to data from Informa Economics. The firm raised its 2013-14 corn crop estimates for both Brazil and Argentina, but both pegs are below USDA's latest projections. The firm also expects Ukraine's 2014-15 crop to come in 4.9 MMT below the previous marketing year.
Technical analysis: May corn futures settled steady with psychological resistance at $5.00. The high-range close gives bulls the advantage heading into the overnight session. Their initial target is Tuesday's high of $5.12 1/2. This week's low of $4.75 1/2 is support, closely followed by the March 11 low of $4.73 1/4.
Hedgers: 70% sold on old-crop. 30% of expected 2014-crop is sold via forward contract for harvest delivery.
Cash-only marketers: 60% sold on old-crop. 30% of expected 2014-crop is sold via forward contract for harvest delivery.
Price action: Soybean futures rebounded from yesterday's selloff with 5 to 13-cent gains, with the lead contracts leading the rise. Futures finished near their highs of the day. Funds bought 5,000 soybean contracts (25 million bu.) today.
Fundamental analysis: Soybean futures moved higher on ideas yesterday's selloff was overdone. The export sales report, while at the low end of expectations, did not show any major cancellations. Traders have feared cancellations of orders by China as the Brazilian crop came available. Brazil's harvest is now available and no significant cancellations have been made. Moreover, USDA said China was the lead buyer in this week's export sales report.
Adding to the positive tone today were gains by soybean oil futures. Soyoil saw gains as more news surfaced the bill reactivating the biodiesel tax credit is making its way through the Senate.
Technical analysis: May soybean futures posted an inside day with yesterday's low providing support on early weakness. The $14.60 area, once a resistance area, has acted as support this week. The February-March uptrend line serves as support and has not been tested. Yesterday's high at $14.96 is resistance with psychological resistance at $15.00.
Hedgers: 25% of expected 2014-crop is sold via forward contract for harvest delivery. 100% sold in the cash market on 2013-crop production.
Cash-only marketers: 25% of expected 2014-crop is sold via forward contract for harvest delivery. 90% priced on old-crop.
Price action: Wheat futures closed near their highs of the day. All three flavors of wheat saw gains ranging from 5 to 9 cents. Funds bought 3,000 contracts (15 million bu.) today.
Fundamental analysis: Wheat futures bounced higher on ideas yesterday's selloff was overdone. Futures gained ground from today's strong weekly wheat export sales report which came in at 336,400 MT for 2013-14 and 310,500 MT for 2014-15. Both figures topped expectations. Exports of 523,100 MT were also solid. In addition, the Food and Agriculture Organization of the United Nations cut its global 2013-14 wheat crop forecast by 2 MMT to 702 MMT, which also provided support.
HRW wheat futures retreated in late-morning trading on news Informa Economics projected the 2014-15 U.S. winter wheat crop at 1.616 billion bu., up 82 million bu. from 2013-14. In addition, weather forecasts called for precipitation over the parched Southern Plains. But futures firmed as traders realized more extensive precipitation is needed to recharge the dry soils in the region. In addition, a closer look at the Informa figures had traders thinking the gains in winter wheat production may be coming from soft red winter wheat rather than hard red winter wheat. HRW wheat futures surged as a result.
Technical analysis: May SRW wheat futures posted an inside day with support appearing at yesterday's low. This suggests the $6.65 area may become an important support zone. The February-March uptrend line serves as support and remains untested. The $6.90 area is the first area of resistance, which is the bottom end of a 30-cent wide resistance area.
Hedgers: 50% of expected 2014-crop is sold via forward contract for harvest delivery. 100% sold on 2013-crop.
Cash-only marketers: 90% sold on old-crop. 50% of expected 2014-crop is sold via forward contract for harvest delivery.
Price action: Cotton futures faced pressure today and ended 27 to 72 points lower on the day, with nearbys leading to the downside. This was a mid- to low-range close.
Fundamental analysis: This morning's weekly export sales data from USDA reflected less robust demand for U.S. cotton than traders had hoped. Sales of 42,700 RB for 2013-14 were down 49% from the previous four-week average. Sales were better for 2014-15 at 71,500 RB, though still not robust. And traders are fearful more weak tallies may be ahead as mills have responded well to China's efforts to boost demand for state reserves, including a price cut and adjusted import quota requirements.
The market received news late in today's session that the U.S. attaché in Egypt expects the country to import a record volume of cotton in 2014-15.
Technical analysis: May cotton futures extended the market's recent downtrend today, though the contract has yet to test support at 90.00 cents, which roughly coincides with the late-March lows. The contract must move back above the March 31 high of 94.80 cents to signal a short-term top is in place.
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.