Price action: Corn futures finished 6 1/2 to 8 1/4 cents lower today, which was on or near session lows.
Fundamental analysis: News China rejected the first 2,000 MT of U.S. dried distillers gains (DDGs) due to the presence of MIR 162 (Syngenta's Agrisure Viptera), which is not yet approved by the country, weighed on corn futures today. While Chinese rejections of U.S. DDGs has widely been expected for weeks, the news was still damaging in what was otherwise a quiet news day coming out of Christmas. More rejections are expected as Chinese quarantine authorities have been instructed to increase their testing for the GMO trait in U.S. shipments.
An improved South American weather outlook also weighed on corn futures today. While this is more of a factor for the soybean market, improved rain chances in Argentina over the 6- to 15-day window added to the negative tone today.
After covering some of their short position over the past week-plus, funds were net sellers of 6,000 contracts (30 million bu.) of corn today. Unless their attitude changes over the last three sessions of 2013, funds are showing little urgency to actively lighten their short stance.
Technical analysis: December corn futures wiped out four days of corrective gains with today's losses as the contract continues to chop in a short-term consolidation range. Support is at the contract low of $4.18 1/2 with resistance at $4.49 1/2.
Hedgers: 25% of 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Pressure on the soybean market built as the day progressed. Futures posted double-digit losses in all contracts, with January through July contracts 15 to 17 cents lower.
Fundamental analysis: Traders in the soybean market focused on the moisture component of the short-term forecast for Argentina and a cooler, wetter 6- to 15-day outlook. Rains have and are expected to fall in Argentina this week, but these will likely be accompanied by high temperatures. South American weather will remain in focus near-term.
Also, traders are anticipating Chinese cancellations of U.S. soybean purchases as South American supplies come available. But if China actively cancels U.S. dried distillers grains, it could increase demand for soybean imports as it would drive up soybean meal demand.
Thin trading volume amplified pressure today. Another light trading session is expected Friday.
Technical analysis: January soybeans finished the day near the bottom of the market's recent consolidation range, the bottom of which around $13.10 marks support. The top of this range at the December high of $13.53 1/2 marks resistance.
Hedgers: Get to 100% sold in the cash market on 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on 2013-crop production.
Price action: The wheat complex faced pressure throughout the day, but the SRW market staged a late reversal to finish steady to 1/4 cent lower in the front two contracts and around a penny higher in deferred months. HRW wheat also finished high-range but with losses around 1 to 2 cents, while HRS wheat ended mid- to low-range with fractional to 3 1/4-cent losses.
Fundamental analysis: Spillover from the corn and soybean markets weighed on the wheat market today, as did the fully bearish technical posture of the market. The wheat market hit yet another set of fresh contract lows today. Traders remain concerned about tepid demand for U.S. wheat. Tomorrow's export sales data is expected to again reflect lackluster demand.
The generally good condition of the winter wheat crop when it entered dormancy means production concerns are far from traders' minds. However, the return of frigid temps next week could shift attitudes, especially since mild conditions this week are eroding protective snowcover in some areas. This provided some late support, as did the front-month SRW contract's ability to respect key support.
Technical analysis: March SRW wheat futures hit a new contract low and came within 3/4 cent of tough psychological support at $6.00 before rebounding to a high-range close. The contract must rise all the way to the $6.50 area to find resistance.
Hedgers: 75% sold on 2013-crop in the cash market. No 2014-crop sales are advised.
Cash-only marketers: 50% sold on 2013-crop. No 2014-crop sales are advised at this time.
Price action: Cotton futures settled narrowly mixed with the March through July contracts slightly lower and farther-deferred contracts slightly higher.
Fundamental analysis: It was a quiet day in the cotton market coming out of Christmas. Trading volume was light as some traders opted to take an extended vacation. And those traders that did return to work today were dealing with little fresh news. With the end of the year quickly approaching, traders aren't interested in adding new positions on either side of the market. Most of the trade is centered on position evening.
Traders will get weekly export sales data tomorrow morning. But barring any major surprises, another light and choppy day of trade is likely to finish the week.
Technical analysis: Key near-term boundaries for March cotton futures are Monday's low at 81.42 cents and last week's high at 83.85 cents. A downside breakout from that range could signal a short-term top, while an upside breakout would suggest the contract is ready to move the next leg higher after a pause.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.