Price action: Corn futures were choppy with a slight downside bias throughout the day and finished mixed. December corn, which expires tomorrow, closed 8 3/4 cents lower, while deferred contracts ended 5 1/4 cents lower to 5 3/4 cents higher.
Fundamental analysis: Ideas recent losses have been overdone triggered mild short-covering in some corn contracts today. But another sluggish weekly export sales figure limited buying interest. For the week ended Dec. 6, corn sales totaled 258,900 MT for 2012-13 and 13,700 MT for 2013-14. While that was in line with meager expectations, it's a reminder of weak export demand. Gulf basis was also weaker today, which added pressure to corn futures, as that signals no strong export activity is on the near-term horizon.
A firmer U.S. dollar also weighed on corn futures today. With global end-users already seeking alternatives to U.S. corn, traders view dollar weakness as a negative for corn demand.
Technical analysis: March corn futures got within 3/4 cent of the November low at $7.14 1/4. Violation of that level would open downside risk to key support at the September low of $7.08 3/4. If the pattern holds, corn futures should respect support at the bottom of the extended, choppy range and find fresh buying interest.
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 enjoyed moderate gains this morning, but later in the day this gave way to profit-taking and the market ultimately ended mixed with December through May futures up 1 1/2 to 3 cents and deferred months 1 1/2 to 8 3/4 cents lower amid bull spreading.
Fundamental analysis: Soybean futures saw a volatile day of trade, rallying early this morning around an impressive weekly export sales tally for 2012-13 in excess of 1.319 MMT. But futures later softened amid profit-taking and ideas strong demand is already factored into prices. The market's inability to sustain buying interest despite back-to-back weeks of 1-MMT-plus export sales tallies and a sprinkling of daily sales announcements signals a new source of supportive news is needed to renew buying interest.
But a favorable five-day forecast for Brazil and Argentina signal more sideways to lower price action may be in store for the bean pit, especially with the fiscal cliff looming at year-end.
Technical analysis: January soybean futures remain within a narrow, choppy trading range bound by the December high and low of $14.98 1/4 and $14.36, respectively.
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 finished slightly lower in most contracts at all three exchanges following a choppy day of trade. Chicago wheat closed mostly 1/4 to 3 1/2 cents lower, Kansas City wheat 2 1/4 cents to 3 3/4 cents lower, and Minneapolis wheat 2 to 5 1/4 cents lower.
Fundamental analysis: Wheat futures tried early to work higher on short-covering amid ideas losses earlier this week were overdone. But buying interest is light after USDA surprised traders by raising carryover more than anticipated Tuesday. Also, a firmer dollar weighed on the market, as U.S. wheat is struggling to compete price-wise.
Weekly export wheat sales were stronger than anticipated at 518,600 MT for 2012-13 and 54,900 MT for 2013-14. Given negative attitudes toward wheat exports, especially after USDA cut its export forecast by 50 million bu. on Tuesday, it's hard for traders to get excited about a weekly sales figure that just topped expectations.
Technical analysis: March Chicago wheat futures extended this week's sharp price drop and the contract has now retraced 50% of the rally from the June low to the August high. The psychological $8.00 mark is next support, followed by a 62% retracement of the rally at $7.75 3/4 and then the May high at $7.54 1/2. The contract is now heavily oversold at 19.17% based on the 9-day Relative Strength Index, suggesting a time or price correction is overdue.
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 saw two-sided trade today, but the market softened into the close to end slightly lower.
Fundamental analysis: Cotton futures initially benefited from a decent cotton export sales report that included sales of 283,900 running bales (RB) for 2012-13 and 26,000 RB in sales for 2013-14, with China as the lead buyer. While this was down from last week, it was still a decent tally.
But dollar strength and the fact that this export sales tally was not impressive encouraged traders to engage in some profit-taking to take advantage of recent strong gains. Broad risk aversion across the commodity sector, as reflected by losses in the Continuous Commodity Index, was also encouraging to that end.
Technical analysis: The low-range close for March cotton futures will give bears the near-term advantage with uptrending support drawn off the lows since November intersecting around 73.54 cents tomorrow. Yesterday's high of 75.53 cents is initial resistance, followed by the October high of 76.39 cents.
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.