Price action: Corn futures were choppy today but favored a weaker tone and ended 1 3/4 to 9 cents lower amid bull spreading.
Fundamental analysis: While USDA left its 2012-13 corn carryover projection unchanged from last month at 647 million bu. at a time when traders expected a slight increase, traders' reaction to the data was limited. The reason is largely that the markets are in the "holiday doldrums" and there's little fresh news to excite bulls.
Outside markets were more friendly for adding risk, as the U.S. dollar index was sharply lower today. But investors don't want to add too much risk ahead of tomorrow's statement from the Federal Reserve at the conclusion of its policy-setting meeting.
Technical analysis: March corn futures briefly traded below support at yesterday's low of $7.25 1/4 but trimmed losses into the close to finish mid-range. Near-term boundaries are support at the November low of $7.14 1/4 and resistance at the November high of $7.67 1/2.
Hedgers: 100% sold on 2012-crop in the cash market -- 10% for March 2013 delivery. No 2013-crop sales recommended yet.
Cash-only marketers: 75% sold on 2012-crop --10% for March 2013 delivery; 15% for May 2013 delivery. No 2013-crop sales recommended yet.
Price action: Soybean futures initially reacted positively to USDA's report data, but the buying interest quickly faded and futures spent virtually the rest of the day under pressure. Soybeans futures closed 2 3/4 to 13 lower, with 2013-crop contracts leading losses.
Fundamental analysis: USDA cut its 2012-13 soybean ending stocks projection more than anticipated to 130 million bu. this morning, but that failed to spark sustained buying interest. Instead, heavy spillover from the wheat market weighed on soybean futures.
Improved weather in Brazil also weighed on soybeans today. Southern Brazil has gotten needed rains since late last week and more precip is in the near-term forecast. South American crop consultant Dr. Michael Cordonnier says 95% of the Brazilian soybean crop is rated "good" with the other 5% rated "average." There continue to be problems with excessive wetness and planting delays in Argentina, but traders aren't overly concerned. USDA made no changes to its Brazilian or Argentine soybean crop estimates this morning.
Technical analysis: January soybean futures remain in the downtrend drawn off the Sept. 4 and Sept. 13 highs. Violation of that trendline, which intersects around $14.83 1/4 Wednesday, and a push above last week's high at $14.98 1/4 would open the door to a fresh wave of technical-based buying. Resistance would then be at Oct. 24 high of $15.77.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery. No 2013-crop sales advised yet.
Price action: Wheat futures softened as the day progressed and futures ultimately ended near session lows with Chicago and Kansas City wheat 20-plus cents lower and Minneapolis wheat posting losses in the teens.
Fundamental analysis: USDA delivered a Supply & Demand Report that squarely favored market bears today. The initial negative reaction to the report triggered technical selling as futures posted a downside breakout of the market's long-standing (since July) choppy trading range. Followthrough selling tomorrow will be key to confirming this breakout.
In the report, USDA raised its wheat carryover projection 50 million bu. to 754 million bu., whereas traders had expected only a 14-million-bu. increase from November. The 50-million bu. increase stemmed from a like cut to USDA's export forecast. USDA also raised its global production estimate by 2.77 MMT.
Technical analysis: March Chicago wheat futures broke out of the market's downtrending range that has bound price action the past five months. Followthrough selling tomorrow would open downside risk to the psychological $8.00 level, followed by the 62% retracement of the June to August rally at $7.75 3/4.
Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.
Price action: Cotton futures spent most of the day in positive territory and finished high-range with gains of 60 to 150 points, with nearby contracts leading gains.
Fundamental analysis: Support for cotton futures was twofold today -- bullish USDA report data and supportive outside markets. Cotton futures got an early boost thanks to USDA's 190,000-bale cut to 2012 production, whereas traders had expected a 153,000-bale increase. This reduction was due to USDA lowering its national average yield estimate by 9 lbs. from November to 793 lbs. per acre. USDA also trimmed its domestic and global 2012-13 carryover forecasts; expectations were for USDA to raise its U.S. ending stocks projection.
A weaker U.S. dollar index and gains in the stock market and crude oil futures added to bullish enthusiasm.
Technical analysis: March cotton futures closed above near-term resistance at the Dec. 3 high today, opening upside potential to the October high of 76.39 cents. Uptrending support drawn off the lows the past month intersects around 73.15 cents tomorrow.
Hedgers: 50% priced on expected 2012-crop production via cash forward contract for harvest delivery. A breakout from that range is needed to spark a trending move.
Cash-only marketers: 50% priced on expected 2012-crop production via forward contract for harvest delivery.