Price action: Corn futures were choppy throughout the day and ended mixed. March corn ended 4 1/2 cents higher ahead of tomorrow's first delivery day, with May up 1/2 cent and July down 1/4 cent. The rest of the market closed 1 1/2 to 4 cents lower.
Fundamental analysis: Periods of support came on spillover from gains in wheat and soybeans, as well as weakness in the dollar index. But as wheat softened, corn followed suit. While there are signs that corn demand has improved after the recent price break, traders are hesitant to rebuild long positions as they recognize higher prices have halted demand in the past.
New-crop futures were pressured by recent moisture across the Corn Belt that is improving soil moisture and leading to expectations for a rebound in corn yields in the growing season ahead. Traders will also be focused on evening positions tomorrow as they close their books for the month.
Technical analysis: May corn futures spent the day pivoting around yesterday's high of $6.95 1/2 and closed just beneath it. The contract needs closes above the November low of $7.10 1/4 to suggest a low is in the works, but it must return above the February high of $7.47 1/2 to confirm a low is in place.
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 closed 4 to 9 3/4 cents higher through the August contract, the September contract was 2 cents higher while most new-crop contracts finished fractionally to 1 cent lower.
Fundamental analysis: Old-crop soybean futures were supported by demand news as USDA reported a 120,000-MT soybean sale to unknown destinations for 2012-13. With uncertainties about how smoothly Brazil will be able to export its record crop, global end-users continue to buy U.S. soybeans. March soybean futures were also supported by traders exiting short positions prior to the start of the delivery process tomorrow. A strong cash market should mean there are few, if any, deliveries against the March soybean contract.
USDA also announced a 120,000-MT soybean sale to China for 2013-14, signaling the $12.50 level in November soybean futures is a level of "value." Still, new-crop contracts are struggling to get traction as traders anticipate a big rebound in production this year.
Technical analysis: November soybean futures dipped below key support at the November low of $12.55 1/4, but closed above that level. A close below that level would open downside risk to the July low at $12.25 1/4 and potentially to the June low at $11.40.
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 enjoyed gains for most of today's session, but the market pulled back ahead of the close. Chicago wheat ended 1 1/2 cents lower to 1 cent higher, with most contracts favoring the upside. Kansas City wheat ended 1 1/4 to 3 cents higher and Minneapolis wheat settled roughly 1 to 3 cents lower in most contracts.
Fundamental analysis: Wheat futures were the upside leader for much of the day thanks to heightened global supply concerns as well as ideas the downside has been overdone. Russia has indicated it plans to start buying grain from producers in August or September to replenish intervention stocks after it was an aggressive exporter in 2012. Thus, despite an expected rebound in production, the country's grain lobby expects market grain supplies to remain tight through the 2013-14 marketing year. Also, Egypt has 95 days of supply in its strategic reserves and country officials say the government has priority financing for wheat imports.
This could all be favorable for U.S. wheat exports that have recently shown signs of improving. Traders expect tomorrow's Weekly Export Sales Report to show sales between 400,000 MT and 600,000 MT.
Technical analysis: May Chicago wheat futures remain within the downtrending channel that has constrained price action since mid-January and the low-range close gives bears the near-term advantage. Yesterday's low of $6.97 3/4 is near-term support, closely followed by the June low of $6.79. To signal a reversal has occurred, the contract needs closes above the January low of $7.45 1/4.
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 strong buying interest throughout the day and ended high-range with gains of 108 to 274 points, with old-crop contracts leading gains.
Fundamental analysis: Friendly outside markets led to a surge in cotton futures ahead of USDA's weekly export sales data tomorrow morning. Recent reports have indicated a slowdown in export sales despite higher prices.
Adding to the positive tone, the consensus is that U.S. cotton plantings will likely be down sharply from last year. Global 2013-14 cotton stocks are still expected to rise over year-ago levels, but China's appetite for cotton is expected to remain robust.
Technical analysis: Followthrough buying in May cotton futures tomorrow would set the contract up for a challenge of the Feb. 20 high of 85.24 cents. Near-term support extends from yesterday's low of 81.39 cents to the Feb. 13 low of 81.35 cents.
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.