Price action: September corn futures finished 6 3/4 cents lower, while new-crop contracts closed mostly around 3 cents lower with lesser losses in far-deferred contracts.
Fundamental analysis: Funds continued to pump money into the short side of the corn market, extending their record short position. Funds sold a net 4,000 contracts (20 million bu.) of corn today, which was a relatively "light" day.
Fundamental pressure continues to come from weather. A wave of rains pushed across parts of Minnesota and Iowa overnight and this morning before moving into northern Illinois. Additional rains are forecast for tonight and tomorrow. In addition, the mid-range forecast calls for below-normal temps and normal to above-normal precip through at least mid-month. As a result, traders feel yield potential is building.
Technical analysis: December corn futures dropped below long-term support at $4.60, but managed to close 1/2 cent above that level. Next support is at the psychological $4.50 mark. Technically, the contract is oversold on the Relative Strength Index.
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: August and September soybean futures closed 1 1/4 and 5 1/4 cents lower, respectively. New-crop soybeans ended 1 3/4 to 7 cents higher.
Fundamental analysis: Despite rains through the morning in Minnesota and parts of Iowa, selling interest was limited by ideas the downside has been overdone. That led to short-covering, including by funds, who were net buyers of 2,000 contracts (10 million bu.) of soybeans today.
While there was some mild corrective buying today, forecasts call for non-threatening conditions to persist through at least mid-month. That will continue to limit buying interest to mild short-covering as traders feel these conditions will be beneficial for crop development.
Traders are also anxious to see how much demand there is for China's auction of 500,000 MT of state-owned soybean reserves on Thursday. That will be a key indicator for the demand side of the market.
Technical analysis: To give any clue of a potential short-term low, November soybean futures must close above old support at $11.86 1/2. Above that, resistance stands at the psychological $12.00 mark and then at $12.25. Support is at $11.40.
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: SRW wheat futures closed roughly 12 to 15 cents lower, HRW futures ended 9 to 11 cents lower and HRS futures finished 6 to 7 cents lower. Funds were active on the short side of the wheat market today, selling a net 7,000 contracts (35 million bu.) of SRW (Chicago) futures.
Fundamental analysis: Wheat futures have been trying to pull corn and soybeans higher recently as the market works on a seasonal low. But there appeared to be some give-up selling in today's price action. With the continued drop in corn futures, traders also felt wheat had become too high priced compared to corn. The December Chicago wheat/December corn spread stands at $1.97 1/4 after today's 12-cent correction.
While export demand has perked up recently, there's some concern that big purchases from China and Brazil won't be consistent and the U.S. is losing out on some of the smaller tenders to cheaper Black Sea origin wheat. Weekly export inspections, however, were strong at 25.464 million bushels.
Technical analysis: September Chicago wheat futures plunged to a new contract low at $6.41 1/2. Next strong chart support comes from the weekly continuation chart. Support on the weekly chart is layered from $6.07 1/2 to $5.72 1/4.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop sale is sold. 100% sold on 2012-crop.
Price action: Cotton futures settled 8 to 30 points higher today, which was mid- to low-range for the day.
Fundamental analysis: Cotton futures traded solidly higher through much of the day, but buying interest dried up late as traders remain unwilling to commit to either side of the market as they await market-moving news. With USDA's first survey-based estimate of this year's cotton crop due out next Monday, the light and choppy trade is likely to continue the remainder of this week.
In addition to a lack of fundamental news today, outside markets provided very little direction. Cotton needs a strong catalyst to break out of the tightening price pattern.
Technical analysis: December cotton futures are seeing the trading range narrow, with the 85.00 cent area becoming a pivot point. The July trading boundaries are at 83.20 cents and 87.11 cents and the June trading boundaries are at 81.72 cents and 89.56 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.