Price action: Corn futures settled 3 1/2 to 5 1/2 cents lower, which was in the lower end of today's range but off session lows.
Fundamental analysis: Corn futures were under pressure for virtually the entire day amid a lack of bullish news, demand concerns and pressure from wheat. Spillover support from strong gains in the soybean market helped limit selling pressure. But it's disappointing for bulls that corn ended lower in a day when nearby soybean futures were 40-plus cents higher. If support from soybeans wanes, corn is at risk of heavier selling pressure.
Weekly export inspections at just 9.5 million bu. were yet another reminder of sluggish export demand for U.S. corn. Given tight supplies and a strong cash market, it's unlikely export demand will improve dramatically even if prices continue to decline, as global end-users have long been seeking alternative feedstocks.
Funds were net sellers, dumping an estimated 6,000 contracts (30 million bu.) of corn today.
Technical analysis: March corn futures are hovering in the lower end of the broad, sideways range. Key support at the bottom of that range lies at the January low of $6.78. Violation of that level would open sharp downside price risk.
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: Old-crop soybean futures finished near session highs with gains of 25 to 45 3/4 plus cents. New-crop futures generally closed 12 to 13 cents higher.
Fundamental analysis: Early support came from disappointing weekend rains in Argentina, which were badly needed for the filling soybean crop. However, there is rain in the forecast for later this week and weekend rains in southern Brazil were generally viewed as beneficial. But concerns about shipping delays out of Brazil and the late start to harvest in Mato Grosso has traders talking about the possibility of the export window being open later than usual for U.S. soybeans. Also this morning, USDA announced China purchased 120,000 MT of U.S. soybeans for the current marketing year -- adding to these thoughts.
Slight improvement in Gulf basis for immediate delivery and historically strong basis levels across the country renewed concerns about the tight supply situation.
Technical analysis: March soybean futures gapped slightly higher on the open and extended gains to finish above the $14.70 level. Followthrough buying would signal the February break has run its course, but closes above the February high of $14.98 are needed to confirm a low has been posted. Support is at last week's low of $14.04 1/2.
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: Most Chicago wheat contracts posted a bearish reversal today. Chicago wheat futures closed mostly 9 to 10 cents lower, while Kansas City and Minneapolis wheat posted losses around 7 to 9 cents in most contracts.
Fundamental analysis: Late-week heavy rains for the Southern Plains and above-normal rain chances next week for the Central Plains weighed on wheat futures today. While drought continues to impact the region, precip has increased recently, giving traders some (false) hope of a dramatic improvement in crop conditions.
News four Indian ministers have proposed allowing private firms to export up to 5 MMT of government wheat stocks also encouraged selling in the wheat market today. With India stepping up wheat exports, it will be hard for U.S. wheat to make big strides on the demand front. But this morning's strong weekly export inspections tally signals U.S. wheat may finally be attracting export business. Still, traders are taking a "prove-it" attitude toward demand.
Technical analysis: March Chicago wheat futures staged a bearish reversal today. Followthrough selling tomorrow would have the contract challenging last week's low of $7.22, followed by the key $7.00 level. Near-term resistance is the May high of $7.54 1/2, followed by the Feb. 8 high of $7.70 3/4.
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 enjoyed followthrough buying to start the week. Futures ended 58 to 105 points higher through the December contract, while far-deferred months closed narrowly mixed.
Fundamental analysis: Cotton futures received a boost from ideas China will return from its Lunar New Year celebration with an appetite for U.S. cotton. Expectations for solid Chinese cotton demand and lower 2013 cotton production in the U.S. have kept futures above the psychological 80.00-cent level since late January. But considering such prices have curbed demand in the past, traders remain hesitant to push prices significantly higher.
Outside markets were also mildly supportive today as the U.S. dollar index was under pressure, while the stock market and crude oil futures enjoyed gains.
Technical analysis: March cotton futures remain well within the bounds of a well-defined short-term trading range with support at last week's low of 80.05 cents and resistance at the Jan. 24 high of 84.00 cents. The eventual breakout from this range should determine the next trending move.
Hedgers: 50% priced on expected 2012-crop production in the cash market.
Cash-only marketers: 50% priced on expected 2012-crop production in the cash market.