Price action: Late-session buying helped to lift nearby corn futures to a bullish reversal. Corn closed roughly 6 to 15 cents higher, with nearbys leading gains.
Fundamental analysis: Early pressure was tied to scattered rains moving across the Corn Belt and strength in the U.S. dollar index. Traders also recognize that deterioration in Gulf basis reflects price rationing.
But futures strengthened around midday as traders worked to even positions ahead of USDA's first survey-based crop estimate on Friday. Traders look for USDA to slash its projected yield by 20 bu. per acre from last month to around 126.2 bu. per acre. Tightening carryover levels are also expected for 2012-13 and traders don't want to be caught short heading into the report in case of a bullish surprise. See "Evening Report" for pre-report expectations.
Technical analysis: December corn came within 3 1/4 cent of contract-high resistance of $8.20 1/2. Today's high-range close gives bulls more momentum heading into the open. Support begins at last week's low of $7.81 1/4 and extends to the July 24 low of $7.45 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 saw two-sided trade today, but the market surged into the close to settle mostly 2 1/4 to 24 3/4 cents higher with nearby contracts leading gains. Action in the soymeal and soyoil markets mirrored that of soybeans, with both ending with gains for the day.
Fundamental analysis: Soybeans saw choppy trade due to pre-report positioning today; this will likely be the case tomorrow, too. While traders expect USDA to confirm tight old-crop carryover and a drought-damaged crop, there is uncertainty about whether high prices are slowing use enough to stretch supplies. Today, USDA announced a 140,000-metric-ton soybean sale for 2012-13 to unknown destinations -- the second bean sale this week.
Adding to supply uncertainty are forecasts for scattered rains, which could still improve yields for those lucky enough to receive them.
Technical analysis: November soybean futures remain in a short-term downtrend, but the contract has yet to do significant technical damage as near-term support at the July 25 low of $15.36 has yet to be tested. Last week's high of $16.63 1/4 is near-term resistance.
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 built on a firming tone at midday and rallied into the close to finish near session highs. Chicago wheat was mostly 10 to 12 cents higher, Kansas City wheat mostly 8 to 10 cents higher and Minneapolis wheat mostly 7 to 12 cents higher. The exceptions were far-deferred Chicago and Kansas City wheat futures, which finished under pressure.
Fundamental analysis: Wheat futures were pressured by weakness in the corn market and a firmer U.S. dollar for much of the session. But as the corn market rallied late, wheat followed as traders covered short positions.
News that Russia doesn't plan to restrict wheat exports also weighed on the market initially this morning. But even if the Russian government doesn't curb exports, sales from the country -- and the Black Sea region as a whole, will be down sharply in 2012-13.
Technical analysis: Key boundaries for September Chicago wheat futures lie at the July 24 low at $8.52 3/4 and the July high at $9.47 1/4. A breakout from this range is needed to kick off the next trending move.
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 shook off earlier pressure to finish slightly higher and in the upper end of today's range.
Fundamental analysis: For the most part, cotton traders are biding time ahead of USDA's first survey-based estimate of the cotton crop Friday morning. With traders expecting the crop estimate to decline from July's projection, focus today was on covering short positions.
Additionally, cotton traders are paying more attention to crop woes in India due to poor monsoon rains. Reduce production in India should create more demand for U.S. cotton. And U.S. cotton prices are competitively priced on the global market.
Technical analysis: December cotton futures are pausing on top of old resistance at 74.80 cents. If that level turns into solid support, it would signal a successful breakout from the extended, choppy range, and would point to a stronger price recovery.
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.