Price action: Corn futures settled mid-range with losses of 6 1/2 to 9 3/4 cents in most contracts following a downside day of trade.
Fundamental analysis: Corn futures held up relatively well in the face of heavy spillover from soybeans today. But a reminder of pitiful export demand did cause nearby corn futures to break through and close below the psychological $7.00 level today.
Weekly corn export sales of 114,400 MT for 2012-13 and 5,800 MT for 2013-14 were well below unimpressive pre-report expectations. But news around midday that Argentina's ag ministry trimmed its corn plantings forecast to 4.6 million hectares from 4.7 million hectares did return some light short-covering to the market that helped corn futures finish well off their lows.
Technical analysis: Followthrough selling after yesterday's downside breakout signals the March corn contract is likely headed for a test of the July 5 gap from $6.93 to $6.83 1/2. The contract finished just pennies away from the top of the gap today. Former support at $7.00 is now resistance.
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 faced heavy pressure again today and finished 22 3/4 to 28 1/4 cents lower in the January through August contracts, with nearby contracts leading to the downside. Farther deferred months saw lighter losses. Soymeal and soyoil futures followed beans sharply lower.
Fundamental analysis: Funds dumped more soybean contracts today as futures failed to respect near-term support levels and appear headed for a test of the November lows. The catalyst for today's selloff was largely USDA's announcement China had canceled another 540,000 MT of soybean purchases for 2012-13; earlier this week China canceled 300,000 MT in soybean buys and unknown destinations (also China?) canceled 120,000 MT.
This overshadowed today's weekly export sales tallies of 619,400 MT for 2012-13 and 10,500 MT for 2013-14. While total sales were below expectations, this still represents solid demand and an export pace well above that needed to reach USDA's export projection.
Technical analysis: January soybean futures neared but did not test psychological support at $14.00 today. A move through this level on followthrough selling would be the last barrier to a test of the November low of $13.72 1/4. The contract remains quite a distance from near-term resistance at last week's high of $15.08 3/4.
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 faced pressure throughout the day and ended near the bottom of their daily trading range with Chicago wheat roughly 15 cents lower; Kansas City wheat 10 1/2 to 14 1/4 cents lower and Minneapolis down 9 to 11 3/4 cents.
Fundamental analysis: The market remains in risk-reduction mode ahead of what will be an extended holiday break for some and the fiscal cliff looming as-yet unresolved at year end. This plus heavy spillover pressure from soybeans and needed precip in the Central Plains pressured wheat futures today. And it is too early in the growing season for traders to get overly excited about a seasonal drought outlook that spells trouble for the winter wheat crop (see "Evening Report" for more).
Traders ignored a weekly export inspections tally that topped expectations, signaling U.S. wheat may finally be benefiting from tighter global supplies. They also paid little attention to news Argentina's ag ministry trimmed its wheat production peg by 1 MMT to 10.5 MMT.
Technical analysis: Chicago March wheat futures continue to make their way toward support at the 62% retracement of the June to August rally at $7.75 3/4. A corrective bounce would have bulls eyeing former support at $8.00.
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 settled high range with the March through July contracts around 20 points lower, October futures 4 points higher and far-deferred months 2 to 16 points lower.
Fundamental analysis: Another solid weekly export sales report for cotton helped the market fend off heavy losses other commodities saw today, but the market was unable to totally ward off the broad risk aversion that led to losses in the grain and soybean markets today.
Weekly export sales 333,900 RB for 2012-13 and 2,600 RB for 2013-14 were up from last week, with China as the lead buyer. This helped advance the pace of cotton exports for 2012-13 relative to the previous marketing year. But at 17% behind last year's pace, the current pace of exports must pick up if it is to match USDA's forecast for 2012-13 exports to rise 0.7% over the previous marketing year
Technical analysis: March cotton futures appear to be consolidating this week, but the contract remains within the uptrending channel since November. Uptrending support drawn off the November and December lows intersects near 74.28 cents tomorrow. This week's high of 76.29 cents is near-term resistance, closely 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.