Price action: Corn futures faced pressure throughout the session with selling pressure mounting into the close. September through July 2013 futures ended with losses in the mid-teens, while far-deferred months closed with slightly lighter losses.
Fundamental analysis: Today held little in terms of fresh news for corn , leaving the market vulnerable to profit-taking amid spillover pressure from soybeans. Weekend rains in the Corn Belt are not expected to improve the crop, but along with recent milder temps they are expected to stem crop deterioration. Pre-report expectations are for USDA to leave its crop condition rating unchanged this afternoon at 23% "good" to "excellent."
Better-than-expected weekly export inspections and firmer Gulf basis levels at midday raised some questions about supply rationing and encouraged light short-covering at times today.
Technical analysis: December corn futures have yet to do any serious chart damage. Key near-term support is at the July 24 low of $7.45 1/2. Resistance stands at Friday's contract high of $8.49.
Hedgers: 100% sold on 2011-crop in the cash market. 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.
Cash-only marketers: 100% sold on 2011-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 faced heavy selling pressure today, ending with losses of 39 3/4 to 53 1/4 cents in the August through January contracts. Farther deferred futures posted losses in the 28- to 32-cent range. Futures finished near session lows.
Fundamental analysis: Soybean futures faced a round of profit-taking and long liquidation today. Weekend rains and a relatively mild near-term weather forecast provided fundamental backing for the corrective selling. While traders are uncertain exactly how much rains will help the crop, it's hard to fight off selling pressure when rains are falling in August -- even on a crop that has been trimmed by severe drought thus far.
The question now is how far futures fall before a fresh wave of export demand surfaces. Given tight supplies, end-users are likely to remain quick to jump in as buyers on price breaks.
Technical analysis: November soybean futures remain well within the established, short-term trading boundaries, which extend from $15.36 to the contract high at $16.91 1/2. A breakout from this range is likely to trigger the next strong trending move.
Hedgers: 100% sold on old-crop in the cash market. 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.
Cash-only marketers: 100% sold on old-crop. 50% sold on expected 2012-crop production for harvest delivery.
Price action: Wheat futures saw followthrough from Friday's losses and spillover from neighboring pits to post double-digit losses at all three exchanges. Chicago wheat closed 21 1/2 to 28 1/2 cents lower in the September through May contracts, with Kansas City wheat down roughly 23 to 28 cents. Minneapolis wheat ended 19 1/4 to 24 1/4 cents lower.
Fundamental analysis: Traders still have USDA's higher-than-expected all wheat crop estimate on their minds. Even though USDA raised usage categories for 2012-13, carryover still came in higher than expected due to the larger crop projection and 10-million-bu. increase to imports.
Adding to pressure was news FranceAgriMer raised its soft wheat crop estimate to 36.5 million metric tons (MMT) from 35.9 MMT, which is in line with the estimate from France's farm ministry, which pegs the crop at 36.7 MMT. The availability of new-crop supplies in the country added to weakness, although harvest is still ongoing.
Technical analysis: September Chicago wheat posted a downside day of trade on the charts and violated the August low of $8.56. A drop through $8.23, which marks a 38% retracement of the rally from the June low, would confirm a high has been set.
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 saw followthrough pressure from Friday's losses and posted a low-range close. Futures ended 114 to 160 points lower in the October through July contracts.
Fundamental analysis: Traders still have USDA's bearish Crop Production and Supply & Demand Reports on their minds. The larger-than-expected crop estimate raised carryover more than expected, although traders remain concerned about the crop due to ongoing drought conditions in the South.
However, traders continue to talk about disappointing monsoon rains in India and Pakistan and too-wet conditions in China's production region, which have raised quality concerns.
Technical analysis: December cotton futures posted a daily low of 71.59 cents and ended just above that level to post a downside day of trade on the daily chart. Next support is at the August low of 70.21 cents and resistance stands at last week's high of 77.07 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:s100% sold on old-crop. 50% priced on expected new-crop production via forward contract for harvest delivery.