Price action: Corn futures faced pressure for most of the session and selling picked up heading into the close. Futures ended 10 to 16 cents lower, with nearbys leading losses. After buying 30,000 corn contracts yesterday, funds sold 12,000 corn contracts (60 million bu.) today.
Fundamental outlook: Profit-taking weighed on the corn market for most of the day, and this increased after midday as selling in the soybean market picked up and midday weather updates hit the market. These weather updates were a bit wetter for the Midwest over the next two weeks, after which cooler temps are expected to move in. As a result, nearby contracts closed back below the $5.00 mark.
However, downside risk for the corn market should be limited as the Midwest is baking again today and the forecast calls for heat to persist over the next several days and well into the week ahead, stressing an already drought-impacted crop.
Technical outlook: December corn saw an inside day of trade and a low-range close, settling back below the important $5.00 level. Another move through that level would open upside potential to the July high of $5.28 1/4. The bottom of yesterday's upside gap at $4.74 1/2 is support.
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 were choppy today but faced stepped up profit-taking into the close to end with double-digit losses. September beans closed 13 3/4 cents lower, with November through March down 17 1/4 to 21 1/2 cents. Meal and soyoil saw spillover pressure.
Fundamental analysis: Following yesterday's sharp gains, soybean futures were vulnerable to profit-taking. Futures were stronger at times due to concerns about filling beans and pod abortion due to extreme heat across the Corn Belt, but the inability of the market to sustain early gains gave way to some profit-taking.
There is some rain in the forecast for next week, but extreme heat across the Corn Belt this week could bring buyers back to the bean pit. Today's price action is a reminder that weather rallies bring strong volatility and not to get more bullish as prices rise.
Technical analysis: November soybean futures came within a 1/4-cent of contract-high resistance of $14.09 3/4 before turning back. A move above that resistance would make bulls' next target the $14.50 level, following by the 2013 high on the monthly continuation chart of $15.58 3/4.
Hedgers: 50% of expected 2013-crop production is sold via a forward-price cash 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 a forward-price cash contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Price action: Wheat futures were mixed much of the day across all the flavors, but as corn and soybeans softened into the close, wheat followed suit. SRW and HRW futures ended mostly around 1 to 3 cents lower, with HRS futures ending narrowly mixed.
Fundamental analysis: Besides keeping an eye on the neighboring corn and soybean markets, wheat traders still have yesterday's stronger-than-expected wheat inspections report on their minds, as it signaled there was still more room for USDA to raise its export projection. Additional support came from weakness in the U.S. dollar index.
HRS futures were supported at times by concerns rains in the forecast will slow spring wheat harvest and raise concerns about its quality. But with harvest yet to cross the halfway mark, there is the potential for hedge-related pressure to build.
Technical analysis: December SRW wheat futures posted an inside day of trade on the daily chart and have a lot of work ahead in order to signal a near-term low has been posted. Resistance begins at the August high of $6.79 3/4 and extends to the July high of $7.05 3/4. Contract-low support lies at $6.35 1/2.
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 settled low-range with losses of 54 to 82 points through the July contract, with deferred months seeing lighter losses.
Fundamental analysis: Traders had USDA's Crop Progress and Condition Report to digest today. They focused on the fact that USDA again raised the amount of the crop rated in "good" to "excellent" condition by one percentage point to 47%. But on a less favorable note, the development of the crop continues to lag the average pace, with 10% of the cotton crop opening bolls compared to 20% on average and 23% last year.
Spillover pressure from the grain and soy markets added to the negative tone.
Technical analysis: December cotton futures continue to consolidate just above the 84.00-cent area, with support layered from 83.58 cents to 81.72 cents and resistance at yesterday's high of 85.54 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. 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.