Price action: Corn futures started the day under pressure, but eventually benefited from spread unwinding with soybeans and spillover from wheat futures. Corn ended the day near session highs with gains of 3 3/4 to 4 3/4 cents. Funds bought an estimated 11,000 contracts (55 million bu.) of corn today.
Fundamental analysis: There wasn't a lot of fresh news for the corn market to digest today, but spread unwinding with soybeans was supportive for corn this morning, as was a boost in Gulf basis that signals fresh demand news is on the horizon. Traders will have to wait until Friday morning for USDA's weekly export sales data to gauge if demand remains red hot or has softened as prices inch higher.
Traders are also anticipating the Thursday-Friday USDA Outlook Forum, in which the agency will update its longer-term projections. Traders are anticipating reduced corn acres this year compared to the baseline projections released last week.
Technical analysis: March corn futures posted an upside day of trade on the daily chart and the first close above $4.50 since October 25. Back-to-back closes above this level would turn it into initial support. December corn came within 1/4 cent of the December high of $4.69. Closes above this level would make the next upside target the November high of $4.78 1/4.
Hedgers: 60% sold in the cash market on 2013-crop. 20% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Cash-only marketers: 50% sold in the cash market on 2013-crop. 20% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Price action: Soybean futures ended steady to 6 3/4 cents lower, with the bulk of the price pressure on old-crop contracts. Funds were net sellers of 5,000 contracts (25 million bu.) of soybeans for the day.
Fundamental analysis: Corrective trade dominated price action in the soybean market today. In addition to traders taking profits following yesterday's strong gains, soybean futures were also pressured by bull spread unwinding and long soybean/short corn spread unwinding. With USDA's projections for 2014-15 at the Ag Outlook Forum tomorrow and Friday likely to show increased soybean plantings from the baseline numbers released last week, there is risk of more corrective trade. Plus, traders sense Chinese cancellations of U.S. soybean purchases are inevitable at some point.
Eventually, there will be a shift in focus from bullish old-crop fundamentals to a much less favorable outlook for the 2014-15 marketing year. But for now, tight old-crop supplies are enough to limit the downside to corrective trade.
Technical analysis: March soybean futures got within 6 cents of the September 2013 high before fading. That level at $13.77 3/4 stands as tough resistance that must be cleared to build upward momentum on this push higher. Key near-term support is at old resistance at the December high of $13.39 1/4. A close below that level would signal a top has been posted.
Hedgers: 100% sold in the cash market on 2013-crop production. 10% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Cash-only marketers: 90% priced on old-crop. 10% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Price action: Wheat futures closed higher, finishing very near their daily highs. Gains ranged from 3 to 4 cents for HRS wheat futures to 5 to 8 cents for HRW and SRW wheat. March SRW wheat futures led gains with an 8 1/4-cent-higher close. Funds bought an estimated 5,000 contracts (25 million bu.) of SRW wheat today.
Fundamental analysis: Wheat futures opened about even with the previous day's close as traders waited to see if a wave of profit-taking would move into the market on the stronger U.S. dollar and following recent gains. It did not and futures moved higher. Traders expressed concerns over the next arctic blast due for winter wheat country where some fields are unprotected with snowcover an vulnerable to winterkill.
Technical analysis: March SRW wheat futures closed at their daily highs and their highest level since Dec. 16. Today's finish marks two closes above the 2014 high in the $6.10 area and possibly sets up that mark as a support zone. The $6.30 area is the next area of resistance. The 2014 uptrend line offers support at the $5.83 area while the steeper February uptrend offers support at $6.00.
Hedgers: 100% sold on 2013-crop in the cash market. 35% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 75% sold on old-crop. 35% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Price action: Cotton futures posted a low-range close with losses of 72 to 157 points through the October contract, with deferred futures ending 27 to 51 points lower.
Fundamental analysis: Cotton futures were pressured by profit-taking given strength in the U.S. dollar index today. Cotton was also pressured by cocoa, which fell on profit-taking after hitting a multi-month high earlier in the day. Traders in the cotton market will have to wait for fresh demand news until Friday, as the weekly export sales data is delayed due to Monday's holiday. If no other fresh news surfaces, cotton will continue to take its lead from other markets.
Technical analysis: March cotton futures posted a downside day of trade on the daily chart but held within the boundaries of the two-week trading range and uptrending support. But followthrough pressure tomorrow would pose a threat to the uptrend. December cotton futures posted an inside day of trade and ended mid-range. Near-term boundaries for the new-crop contract are support at the 77.00-cent level and resistance at last week's high of 78.42 cents.
Hedgers: 75% of 2013-crop is sold in the cash market. 25% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 75% of 2013-crop is sold. 25% of expected 2014-crop production is forward sold for harvest delivery.