Price action: Corn futures were choppy today, but favored a firmer tone in daytime trade and posted a high-range close with gains of 3 1/2 to 4 1/2 cents.
Fundamental analysis: Early price action was muted as trader were focused on evening positions ahead of tomorrow's USDA Reports. Traders look for USDA to trim carryover by around 26 million bu. from last month's tally of 1.887 billion bushels. While a downtick in carryover is usually price-positive, supplies are in a rebuilding stage, therefore upside potential will be limited unless USDA cuts carryover more than traders expect.
By mid-morning futures extended gains as traders reacted to the weekly export inspections report that showed corn inspections better than expected at 40.246 million bushels. Additional support came on spillover from soybeans and from funds lightening their short exposure to the market.
Technical analysis: March corn futures posted an upside day of trade on the daily chart. The high-range close gives bulls more momentum heading into the overnight session. Futures ended the day just below last week's high of $4.39 1/2, which is initial resistance. Closes above the November high of $4.49 1/2 would signal a near-term low is in the works.
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 enjoyed gains during the overnight and day session, and futures ended high-range with gains of 7 1/2 to 18 1/4. Soymeal enjoyed strong gains while soyoil posted slight losses on the day.
Fundamental analysis: The soybean market benefited from short-covering ahead of USDA's reports tomorrow as well as reminders of strong demand for U.S. soybeans. Pre-report expectations are that USDA will trim its soybean carryover estimate by around 16 million bu. from November to 154 million bu., due to strong export demand.
A 290,000-MT soybean sale to China this morning reminded of demand strength, as did export inspections of 60.43 million bu. for the week ended Dec. 5. This tally represented roughly a 5.5-million-bu. increase from the week prior and topped expectations.
Technical analysis: January soybeans matched last week's high of $13.46 early this morning and finished just pennies below this resistance level. A move through that price and $13.50 would open upside potential to the top of the Sept. 16 downside gap at $13.78 1/2. The mid-November high of $13.21 1/2 is initial support, followed by the psychological $13.00 area.
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 fractionally weaker throughout much of the day after posting gains in the overnight session. SRW wheat futures closed 1 3/4 cents higher in the expiring December contract but 1/2 to 1 cent lower in deferred futures. HRW wheat futures closed fractionally mixed. HRS wheat finished 5 cents higher in the lead December contract but 2 to 4 1/4 cents lower in the deferred contracts. Futures closed near their lows for the day.
Fundamental analysis: Wheat futures found initial support from concerns of damage to the hard red winter crop due to the weekend's extensive sub-zero temperatures. Some weather/crop watchers indicate 5% of the crop, primarily in western Nebraska, was vulnerable to winterkill. A strong export inspections tally also tended to support futures along with spillover strength from both corn and soybean futures.
But despite the better news from weekly export inspections, the market's mood remains extremely bearish due to lingering concerns U.S. wheat prices are not competitive on the global market. That attitude continued today despite a weaker U.S. dollar index.
Technical analysis: The early surge above Friday's high failed to attract follow-through buying and futures slumped back to test support at $6.50 on the March SRW contract. The $6.55 area is becoming a resistance area. If futures can press that developing resistance area, the contract would take aim at the December high of $6.74 3/4. The contract low sits at $6.47 3/4. If that fails, the rounded double-bottom formation would be negated, setting up the $6.40 area as the next area of support.
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 with slight losses following a back-and-forth day of trade.
Fundamental analysis: Traders showed no willingness to add positions on either side of the market today ahead of USDA's December crop reports Tuesday. Traders are expecting USDA to raise its crop estimate roughly 100,000 bales, based on the average pre-report guess. Carryover is seen holding steady, however. Barring any major surprises on the domestic front, USDA's projection for Chinese imports should draw more attention.
If there is no market-moving news in tomorrow's USDA data, traders will turn much of their attention to year-end positioning. Funds are still holding a net long position, but it's dramatically smaller than it was in late summer/early fall, so there's limited risk of active fund selling unless they choose to move to a flat or net short position.
Technical analysis: March cotton futures paused today following last Friday's strong push higher, but the contract appears to have put in a short-term low. Tough resistance on the recovery stands at old support at 81.64 cents. If the corrective rebound runs out of steam, key near-term support is at the November spike low at 76.65 cents.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.