Price action: Corn futures closed fractionally to 1 1/2 cents higher today. The week started with fresh contract lows and ended with futures above last Friday's closing levels.
5-day outlook: Futures are hinting at potential bottoming action, though it's way too early to definitively say a low is in place. Funds have started to cover short positions amid end-of-the-year positioning. With funds still holding a sizable short position, more short-covering is possible next week. Any fundamental direction will come from USDA's Supply & Demand Report on Tuesday, though traders are expecting just modest changes to the demand side of the balance sheet and there will be no production update for corn this month.
30-day outlook: Export demand has greatly improved as low prices are encouraging foreign buying. But with the threat of more Chinese rejections of U.S. corn cargoes hanging over the market, it will be hard for export demand to be price-supportive. Any price strength in corn over the next month is likely to come from corrective buying.
90-day outlook: The rebuilding of the demand base for corn is underway, but it will take time to play out. With corn supplies expected to be plentiful through the 2013-14 marketing year and also for 2014-15, periods of price strength will be limited.
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: Soybean futures finished out today's session fractionally to 2 1/2 cents lower through the August 2014 contract. Far-deferred contracts ended around a penny higher. For the week, price action was choppy and futures posted slight losses.
5-day outlook: Soybean futures stalled at the top of the extended sideways trading range this week. While this may be a pause before the market pushes the next leg higher, it could just as easily signal the market has run out of upside momentum. USDA's Supply & Demand Report on Tuesday could be the deciding factor in which direction soybean futures go. Traders are expecting a drop in projected carryover as they see USDA raising its export forecast.
30-day outlook: Funds are still holding a large long position in soybeans. While they are likely to maintain a net long position given strong export demand, odds are they will take profits on some of these positions before year-end, which would likely pressure futures.
90-day outlook: The South American growing season if off to a favorable start and record production is very likely. If conditions remain favorable into harvest and record production is confirmed, funds will have less incentive to hold long soybean positions. Focus will then be on how efficiently farmers can get beans from the field to ports for export. That will determine how long the export window for U.S. soybeans remains open.
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: Wheat futures traded on the defensive much of the day before trimming losses near the close. SRW wheat futures closed narrowly mixed; HRW wheat closed fractionally higher and HRS closed 1 to 3 cents lower with the exception of the 2014 December contract, which finished fractionally higher. Futures closed sharply lower on the week.
5-day outlook: Strength in the U.S. dollar index prompted by the positive U.S. jobs figure will add to the perception that U.S. wheat is not competitively priced on the global market. That will keep pressure on prices the start of next week. The technical picture has turned more bearish as well with futures back testing fall lows. Canada's record wheat crop puts additional pressure on U.S. prices.
30-day outlook: The hard red winter wheat crop went into dormancy in better condition than in recent years and this week's storm is likely providing snow-cover as protection from extremely cold temperatures. The result is the market will remain positive on 2014 crop prospects and negative on prices as U.S. wheat is not priced competitively on the global market.
90-day outlook: The lack of major crop worries anywhere in the world will keep the focus on demand. And that focus will be negative, as most the U.S. competitors are able to undercut U.S. prices on the global market.
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 finished up to 156 points higher today, with the now-expired December contract and the March contract leading gains. Futures closed near weekly highs and posted solid gains.
5-day outlook: The bearish pause in cotton futures has turned into bullish basing action. Given today's price performance, it appears cotton futures have put in a low. To confirm that, the market must show followthrough buying early next week. USDA will update its cotton crop estimate and the supply/demand balance sheets on Tuesday, which will give the market fundamental direction.
30-day outlook: Sales of China's state-owned cotton reserves are off to a slow start as the minimum price is high and quality is a concern. With fears eased that Chinese cotton sales would slow demand for U.S. cotton, some pressure has been removed from the market.
90-day outlook: The long-term price outlook for cotton will remain tied to Chinese demand. For cotton futures to show sustained price strength, Chinese demand must be consistently strong. Most likely, Chinese cotton purchases will ebb and flow with prices, which points to a sustained choppy price pattern.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.