Price action: Corn futures reversed early gains when pit trading opened and ultimately ended low-range with 1- to 7-cent losses through the September 2013 contract. Far-deferred months finished narrowly mixed.
Fundamental analysis: Corn futures were firmer in early trade, but this gave way to light profit-taking which dominated market action into the close. Encouraging this was positioning for Friday's Crop Production Report. While USDA is expected to put its initial national average yield estimate at 126.2 bu. per acre and 2012 production at 10.971 billion bu., it is also expected to raise its old-crop carryover estimate by 42 million bu. to 945 million bu. as high prices have caused some demand destruction.
Rains in the forecast for the northern and eastern Corn Belt also made it difficult for corn to find buyers, though at this point it would do little good for the crop.
Technical analysis: December corn futures continue to consolidate in a narrow range. The contract must move through the July contract high of $8.20 1/2 to start the next leg higher. Last week's low of $7.81 1/4 is near-term support.
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 posted double-digit losses in all but the front-month contract, which ended just slightly lower. But futures posted a low-range close across the board, with meal and soyoil seeing spillover pressure.
Fundamental analysis: Soybeans were firmer in early trade, but as the day progressed, selling intensified due to improved moisture chances for the Corn Belt. Weather models suggest the best rains will be in the northern and eastern Belt -- keeping the central Belt mostly dry.
Traders are also evening positions ahead of Friday's key USDA reports. The first survey-based crop estimate is expected near 2.786 billion bu., with a yield of 37.2 bu. per acre. Traders look for USDA to lower 2011-12 and 2012-13 carryover from last month's already-tight levels.
Technical analysis: November soybean futures posted a bearish reversal today, making bears' next downward target the July 25 low of $15.36. Violation of that support would strongly suggest a high has been posted. To re-energize bulls, futures must climb above last week's high of $16.63 1/4.
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 favored a weaker tone in choppy trade for much of the day, but Kansas City ended steady to 2 cents higher. Chicago futures ended 3 to 5 3/4 cents lower, with Minneapolis mixed.
Fundamental analysis: Much of today's weakness came on spillover from the corn market, which was lower on concerns about demand destruction. But losses were limited by ongoing global crop concerns. Heightened attention is on Russia's crop and export outlook. Private firm SovEcon said today it sees the country's wheat exports falling to 8.5 million metric tons (MMT) in 2012-13 from 21.6 MMT in 2011-12.
Minneapolis wheat didn't stray too far from unchanged today, with pressure limited by ideas the worst of seasonal hedge pressure is behind the market as harvest is nearing the halfway point.
Technical analysis: September Chicago wheat futures saw limited trade above $9.00, with the contract posting a low-range close. Near-term support lies at last week's low of $8.56, with resistance at last week's high of $9.19 3/4.
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 saw two-sided trade today and ended mid-range with losses of 7 to 32 points through the July 2013 contract. Farther deferred contracts ended with slight gains.
Fundamental analysis: Cotton futures enjoyed strong gains yesterday which encouraged light profit-taking today. But pressure was limited by tightening global cotton stocks prospects -- USDA continues to lower its cotton condition ratings and Indian monsoon rains have disappointed. Yesterday, USDA lowered its "good" to "excellent" rating of the crop by 3 percentage points to 41% and raised the amount of cotton rated "poor" to "very poor" by 5 percentage points to 27%.
Technical analysis: December cotton futures traded up to a multi-month high of 75.98 cents, but the contract was unable to move through the psychological 76.00-cent level, marking it as near-term resistance. Support stands at the July low of 69.40 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.