Price action: Corn futures opened lower, but trimmed losses to finish mixed. The September through May contracts ended 1 1/4 to 7 cents lower, with the rest of the market up 1/2 to 3 cents amid bull spread unwinding.
Fundamental analysis: Early weakness was tied to spillover from sharp losses in the soybean market, but traders trimmed losses as they realize weekend rains will do no more than stabilize the corn crop. Pressure on nearby futures was also limited by positive outside markets. However, if soybean futures continue to soften, it will be difficult for the corn market to generate buying interest.
Pressure on corn futures was also limited by concerns that wheat in the Black Sea region will fall short of traders' expectations, as private and government crop estimates continue to decline. This helped to support wheat futures today, which in turn provided support for the corn market as feed sources are tightening.
Technical analysis: December corn futures posted an inside day of trade on the daily chart to remain within the boundaries of last week's trading range. Resistance stands at last week's high of $8.20 1/2 and support lies at last week's low of $7.71 1/2.
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 pressure throughout the session and ended low-range with losses of 40-plus cents through the January contract; farther deferred months saw lighter losses. Soymeal and soyoil ended with moderate losses due to spillover pressure.
Fundamental analysis: Weekend rains were heavier and more widespread than expected, benefiting filling soybeans. This encouraged traders to book profits to start the week.
But mixed demand data helped the market move off its lows at times today. On one hand, China National Grain and Oils Information Center lowered its soybean import projections for the country today and basis levels have recently softened, pointing to demand slippage. But an export inspections pace that continues to gain on year-ago and USDA's announcement of a 106,000-metric-ton daily soybean sale for 2012-13 to China signal more rationing is needed.
Technical analysis: Though November soybean futures gapped lower on the open and ended with heavy losses, damage to the daily chart was minimal. Near-term support remains at the July 25 low of $15.36, while resistance is layered from last week's high of $16.63 1/4 to the contract high of $16.91 1/2.
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 two-sided trade today but a late surge of buying interest helped futures to finish high-range. Chicago wheat ended roughly 2 to 10 cents higher; Kansas City closed mixed and Minneapolis favored the downside in a choppy finish.
Fundamental analysis: Wheat futures saw choppy trade today, with bears having a slight advantage most of the day and into the close thanks to spillover pressure from corn and soybeans. Instances of short-covering came as the corn and soybeans moved off their lows.
Also encouraging light buying interest was weekly export inspections data that topped expectations and ongoing concerns about the global wheat crop, particularly in the Black Sea region. Russia's ag ministry says it expects wheat output to be 45 million metric tons (MMT) at best. Earlier today, private firm SovEcon lowered its Russian wheat production estimate to 40.5 MMT to 43 MMT from its previous forecast 46.5 MMT.
Technical analysis: Chicago September wheat futures finished high-range but within the bounds of Friday's trade. This leaves last week's low of $8.56 and high of $9.19 3/4 as support and resistance, respectively.
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 futures posted a high-range close to finish 100-plus points higher in the October through July 2013 contracts. Far-deferred futures posted lesser gains.
Fundamental analysis: A combination of dollar weakness and strength in the U.S. stock market improved investors' risk appetite. That, combined with followthrough from Friday's high-range close gave bulls more buying confidence to start the week. Followthrough buying tomorrow would strongly suggest the market is working on a near-term low.
Fundamental support came from news of disappointing early harvest results from southern Texas. Worsening drought conditions have traders concerned the U.S. crop will come in smaller than earlier expected.
Technical analysis: December cotton futures penetrated and closed above resistance at the June high of 74.80 cents. Followthrough buying tomorrow would signal the move was an upside breakout and open upside potential to around the 85.00-cent level.
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.