Price action: Corn futures were softer throughout the day and finished mid-range with losses of 3 3/4 to 5 1/2 cents.
Fundamental analysis: Traders began to more actively even positions ahead of Friday's USDA Supply & Demand Report today. Traders look for USDA to further trim demand to increase carryover from last month, although the average trade guess of 615 million bu. reflects a still-tight supply situation.
Late strength in the soybean market helped to limit losses in the corn pit. Soybean traders are focused on weather concerns in South America, which also impact the corn crop. Thus, if hot and dry conditions linger, further downside risk in corn futures should be limited. But traders also note the safrinha corn crop in Brazil is in its early stages of planting and has the potential of more than offsetting shortfalls from the first crop.
Technical analysis: March corn futures posted a downside day of trade on the daily chart, but remained within the boundaries of the choppy three-week consolidation range. Support at the bottom of the range lies at $7.14 1/2, with resistance at last week's high of $7.46 1/4.
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 3 3/4 to 6 3/4 cents higher, which was on or near session highs.
Fundamental analysis: Soybean traders continue to pay close attention to South American weather. As a result, there were periods of modest price pressure today as forecasts signal the chance for rains in Argentina this weekend and early next week. But no one is selling with conviction as recent rain events have been disappointing. The late price strength and high-range close signal bulls still hold the decided upper hand.
Private estimates for the Argentine crop continue to decline. Included in the list of those lowering their Argentine production forecasts is Dr. Michael Cordonnier (see "Evening Report" for details). While conditions aren't nearly as concerning in Brazil, there are indications crop forecasts there may have peaked.
Technical analysis: March soybean futures posted an inside day up on the daily chart. Key resistance stands at the December high of $15.01 1/4. A close above that level would open upside potential to the November high at $15.45.
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 faced pressure most of the day, but most contracts moved off their lows into the close. Chicago wheat settled mostly 5 to 7 cents lower, Kansas City wheat ended 8 1/2 to 10 3/4 cents lower and Minneapolis closed mostly 4 to 5 cents lower.
Fundamental analysis: Wheat futures remain in a follower's role to corn. Thus, pressure on corn resulted in profit-taking in wheat futures today. Adding pressure were reports India is considering ways to boost its wheat exports; the country had 34.4 MMT of government-owned wheat reserves as of Jan. 1, which is more than three times the minimum "requirement." Rain in the forecast for the Central and Southern Plains also made it tough for wheat to find buying interest.
Countering this were reports Russia will lift its 5% import duty on grain until mid-summer, though this will likely take two months to implement and the benefit to the U.S. may not be substantial. (See "Evening Report" for more details.)
Technical analysis: March Chicago wheat futures today bounced off the $7.50 level, marking it as near-term support, followed by the January low of $7.36 1/4. A return of buying interest would have bulls targeting last week's high of $7.91.
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 saw some bull spread unwinding into the close to end mixed with the March through July contracts 11 to 23 points lower and new-crop months 41 to 82 points higher. This was a high-range close for most contracts.
Fundamental analysis: Uncertainty prevails in the cotton market, which led to some spreading action today. While there are concerns that prices are at unsustainable levels from a demand perspective, 2013 cotton plantings are expected to decline notably from last year. That would lead to more near-term bull spread unwinding.
While there are concerns current prices may choke off demand, buying interest at Chinese auctions of state reserves has been lackluster due to the poor condition of supplies. Therefore, Chinese mill demand may remain stronger than some are anticipating.
Technical analysis: March cotton futures traded down to 80.79 cents today before rebounding and finishing high-range. Today's low is initial support, followed by the psychological 80.00-cent mark. Tough resistance remains at the 2013 high of 84.00 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.