Price action: Corn futures ended narrowly mixed after a choppy day of trade with March and May futures 3 1/4 and 1 1/4 cents higher, respectively. July 2013 to July 2014 futures ended fractionally to 2 1/2 cents lower. Farther deferred months were firmer.
Fundamental analysis: Corn futures saw some bull spreading today as concerns about tight old-crop supplies are being heightened by signs export demand for U.S. corn is improving and there is talk of shipping troubles in South America, while buying in new-crop futures is being limited by expected rebound in U.S. production for 2013-14. Adding to old-crop concerns, the Rosario Grain Exchange cut its Argentine corn production estimate by 1 MMT from last month to 25.5 MMT today and USDA announced a daily corn sale to the unknown destinations this morning. Plus, weekly corn export inspections improved over last week, though they fell well short of expectations.
The storm event that is expected to move into the Corn Belt tomorrow should help replenish soil moisture deficits. This plus dollar strength encouraged light profit-taking in many deferred corn contracts today.
Technical analysis: May corn futures continue to inch closer to key support at the January low of $6.78 1/2. A drop through this support would open sharp downside risk as there isn't much strong chart support until the summer 2012 lows.
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: Soybean futures eroded with the start of open-outcry trade and extended losses, but then trimmed losses into the close. March through September futures ended 6 1/4 to 10 cents lower,while new-crop futures were mixed.
Fundamental analysis: Soybeans were supported overnight by weakness in the dollar index, but early this morning, the dollar began to firm, which weighed on soybean futures. Investors are nervous about what kind of "last-minute" deal lawmakers may make regarding sequestration -- if they strike a deal at all. As a result, traders in the commodity world are hesitant to add risk until more is known.
Meanwhile, USDA announced China purchased 120,000 MT of old-crop soybeans, adding to thoughts the U.S. export window could be open a bit longer than usual due to shipping delays in Brazil. But soybean futures only saw limited support from this sale as focus was on the outside markets.
Technical analysis: May soybean futures posted a downside day of trade on the daily chart but finished mid-range. Near-term boundaries are marked by last week's high of $14.97 and the February low of $13.93 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: Wheat futures finished with losses of roughly 11 to 15 cents in Chicago, mostly 17 to 19 cents in Kansas City and 12 to 15 cents in Minneapolis. Futures at all three exchanges finished on or very near session lows.
Fundamental analysis: Wheat futures were pressured throughout the day by weather as a winter storm is bringing more precip to the Southern and Central Plains. The recent increase in moisture in the Plains has eased traders' concerns with the HRW crop for now. While that may be more perception than reality, it's definitely limiting buying interest and weighing on futures.
Additional pressure came from the U.S. dollar index, which moved from sharp losses overnight to solid gains this afternoon and touched the highest point since late August. A firming dollar is making it difficult for U.S. wheat to be competitively priced on the global market, especially with India actively exporting wheat. Still, the export pace for U.S. wheat is gradually improving.
Technical analysis: March Chicago wheat futures closed below $7.00 for the first time since June 18 of last year. Next strong support is at the June low of $6.69 1/4 and then the contract low at $6.52. July Chicago wheat futures are just a dime above psychological support at $7.00.
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 settled 112 to 145 points lower through the December 2013 contract, which was on or near session lows.
Fundamental analysis: Cotton futures faced pressure on two primary fronts today. Initial pressure came from disappointing economic data out of China. Preliminary data showed China's manufacturing sector slipped this month with a noted downturn in export orders. That sparked potential concerns about Chinese demand for cotton.
Additional pressure came from the U.S. dollar, which reversed course and turned sharp early losses into strong gains this afternoon. The strengthening dollar spurred a rash of late-session selling in cotton futures that resulted in the low-range close.
Technical analysis: Key support for March cotton futures lies at the 80.00-cent mark, which marks the bottom of the month-long consolidation range. A close below this support would open risk to the August high at 78.02 cents, which, if violated, would signal a short-term technical top is in place.
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.