Price action: Impressively, corn futures extended gains into the close to finish around 6 cents higher across all contracts.
Fundamental analysis: March corn futures posted its fourth consecutive day of price gains as traders continue to factor in recent demand improvement. A string of daily sales announcements last week has traders looking for another strong showing in Thursday's weekly sales report. But there is concern if corn rises too far, it would slow demand during this critical time of demand rebuilding. That has capped daily price gains, so far, but today's rise in March corn above the December high signals there's more upside potential on a technical basis.
Dry conditions in southern Brazil are also getting the attention of the market, as it raises concerns about filling crops and whether farmers will plant a second crop of corn after soybean harvest is complete.
Technical analysis: March corn closed above the December high of $4.40 3/4, which makes bulls' next target the November high of $4.49 1/2, which closely coincides with a 38% retracement of the decline from the August high. Above that, resistance is at the 50% retracement level near $4.63. Support is at the 25% retracement level at $4.34 1/2.
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 extended gains through the day and posted a near-session high close in most contracts. The March through September contracts closed 9 to 20 1/2 cents higher, with far deferreds around 1 to 2 cents higher. March meal futures rose sharply to post a fresh contract high, with soyoil also ending higher.
Fundamental analysis: Soybean futures enjoyed followthrough buying from yesterday's gains, as traders are focused to poor conditions for filling soybeans in Brazil. The general thought of the market is the crop will still be a record, but not as large as previously thought. As a result, traders could view gains as overdone at any point and return their focus to beans leaving Brazilian ports.
Technical analysis: Today's price action on a technical basis, however, signals more near-term strength is likely. March beans returned above the $13.00 level and have formed an inverted head-and-shoulder price formation that projects prices higher yet.
Also important to note is today's contract high in March meal futures, which turns the previous high of $440.40 into support. Bulls' next objective comes from the monthly continuation chart at the December high of $454.00.
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: 75% sold on 2013-crop production. 20% of expected 2014-crop production is sold via cash forward contract sale for harvest delivery.
Price action: Wheat futures charged higher today with most SRW and HRW contracts posting gains in the upper teens to 20-plus cents. HRS futures closed roughly 10 to 13 cents higher. All three flavors posted high-range closes.
Fundamental analysis: The wheat market has been reluctant to factor in winterkill concerns in the U.S. to this point. But the weekly update from Texas and the monthly updates from Kansas and Oklahoma showed there's been significant crop deterioration since the crop entered dormancy. As a result, there was more urgency to cover short positions today. Of course, that short-covering was augmented by strong gains in the soybean market and strength in corn futures.
The determining factor on how concerned traders are with the deteriorating crop conditions will show up in price action the next couple days. Followthrough buying tomorrow would suggest concerns are building. A lack of followthrough, however, would signal traders used the deteriorating crop conditions as a reason to cover short positions following the long price slide.
Funds were active in SRW wheat today, buying a net 10,000 contracts (50 million bushels).
Technical analysis: March SRW wheat futures have posted consecutive higher closes above the downtrend from the December and January swing highs, but the move higher is still very much just a correction in a bear market. To spark an extended price recovery, the contract must clear a 25% retracement of the fall/winter price plunge around $5.93 and also violate the downtrend from the October and December swing highs. Tomorrow, that trendline intersects around $6.04.
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 gains of 39 to 60 points. Old-crop contracts finished in the lower end of today's range, while new-crop contracts ended high-range.
Fundamental analysis: Spillover support from the grain and soy markets helped support cotton futures today. While much of the price strength in the grain and soy complex today was in contracts that won't influence new-crop planting decisions, there is some urgency in the cotton market to fight to gain back some acres lost in recent years.
Part of that urgency is driven by expectations for declining old-crop cotton stocks. Traders expect USDA to lower its 2013-14 cotton ending stocks forecast next Monday amid a stronger export outlook.
Technical analysis: March cotton futures have spiked the uptrend from the November and January lows multiple times over the past week-plus, but the uptrend remains intact. Consecutive lower closes below the trendline would signal a top is in place. But if the uptrend remains intact, the contract could make one more push to the upside and tough resistance from 87.62 cents to 90.61 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.