Price action: Corn futures settled roughly 7 to 9 cents higher today, which was high-range. Funds were buyers of 10,000 contracts (50 million bu.) of corn today.
Fundamental analysis: Corn futures benefited from short-covering today amid ideas the downside was overdone yesterday. Some bargain buying also crept into the market. But to trigger active short-covering or strong bargain buying, some fresh export demand likely needs to surface and signal to traders that prices have fallen far enough.
Traders are also starting to show some concern with forecasts calling for warmer temps and continued dry conditions, especially in the western Corn Belt. If this forecast validates, the heat and dryness would likely lead to some kernel abortion.
Technical analysis: December corn futures posted a modest inside day up, but a pickup in price volatility the past three days following the extended price plunge suggests the contract may be starting the process of putting in a short-term low. The contract must close above support-turned-resistance at $4.90 to signal any move higher is more than a temporary correction.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures started the day under pressure but recovered to finish 10 3/4 to 11 1/4 cents higher for the September through January contracts. August beans expired 8 1/4 cents lower today. Deferred futures ended mostly 5 to 6 cents higher. Meal ended stronger amid spreading with soyoil, which ended weaker.
Fundamental analysis: Early pressure was tied to profit-taking and traders initially ignored news that China continues to buy new-crop soybeans. But China's strong appetite for soybeans and concerns about the weather forecast for the Corn Belt helped to firm the market. Dry conditions are expected well into next week, with warmer conditions seen in the northern Corn Belt. This is especially a concern in the western Corn Belt, where drought continues to spread.
Technical analysis: November soybean futures posted a 27-cent daily trading range and closed just off the daily high. Futures violated support at yesterday's low and posted a daily low of $12.13 before matching resistance at yesterday's high of $12.40. Next resistance is the halfway point of the decline from the June high to the August low, which stands at $12.47 3/4.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 20% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Wheat futures faced pressure for most of the session, but after noon CT, the market firmed to finish 1 to 2 cents higher in nearby SRW contracts and steady to lower in deferred months. HRW and HRS wheat finished fractionally to 3 1/2 cents higher for the day.
Fundamental analysis: Wheat futures faced followthrough technical selling pressure today, encouraged by a softening in the cash market. Prices for SRW wheat dipped as farmers in some areas of the Midwest sold some wheat to make room in the bins for upcoming corn and bean harvests. Harvest pressure is also expected to build as spring wheat harvest is picking up.
But some light short-covering did return to the market late in today's session as export sales reports of late have not confirmed ideas U.S. wheat is losing business to Black Sea origin supplies. Spillover from corn was also encouraging to that end.
Technical analysis: December SRW wheat hit another contract low of $6.44 1/2 today, but the contract settled well off this level, signaling a corrective bounce may be in the works. Initial resistance is at the August high of $6.79 3/4, followed by the downtrend drawn off the highs since late April, which intersects around $7.00. Support stands every dime lower beginning at $6.30.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop is sold. 100% sold on 2012-crop.
Price action: Cotton futures saw two-sided trade today and ended mid- to low-range with losses of 14 to 72 points.
Fundamental analysis: Cotton futures again enjoyed some early buying interest stemming from USDA's smaller-than-expected cotton crop estimate and ongoing deterioration in the condition of the crop. But a failed test of yesterday's high encouraged some profit-taking, marking it as tough technical resistance.
Traders also worked to reduce their risk exposure ahead of tomorrow's Weekly Export Sales Report; recent cotton sales tallies have failed to impress. Customs data indicates China imported 338,000 MT of cotton in July, a 16.6% drop from year-ago, according to the National Development and Reform Commission. For the first seven months of the year, cotton imports are down 20.5% from year-ago.
Technical analysis: December cotton futures settled around mid-range and above psychological support at 91.00 cents. Yesterday's high of 92.54 cents is near-term resistance.
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 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery. 100% sold on 2012-crop.