Price action: Corn futures faced pressure throughout the day and ended low range with losses of 6 1/2 to 11 1/4 cents. Nearby months saw the lightest losses.
Fundamental analysis: Bears had control of the corn market again today as some weather models call for rain chances in Argentina and southern Brazil next week, easing South American production concerns for the time being.
This left market participants to focus on the upcoming USDA Supply & Demand Report, which is expected to reflect slower corn demand. Pre-report expectations are that USDA will raise its U.S. carryover estimate slightly to 615 million bushels. Relatively speaking, however, this is still a very tight ending stocks number. Strength in the U.S. dollar index added incentive for traders to book some profits ahead of the report.
Technical analysis: March corn futures settled low-range but well within the market's narrow trading range since mid-January. The boundaries of this range are support at the Jan. 24 low of $7.14 1/2 and 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 ended mid-range with losses of 8 to 12 1/4 cents. Meal and soyoil saw spillover pressure.
Fundamental analysis: Traders are focused on minimizing risk as they prepare for Friday's USDA Supply & Demand Report. And with some rain chances in the forecast for dry areas of southern Brazil and Argentina next week, traders were more inclined to trim their long exposure to the market. While hot and dry conditions this week are stressing crops in key areas like Rio Grande do Sul, Brazil, this week, weather models show the potential for widespread showers early next week.
Traders will fine tune their positions tomorrow as they expect further tightening of carryover due strong demand. The average pre-report estimate is for carryover to drop below 130 million bu., which should limit followthrough pressure tomorrow. However, traders also expect Chinese demand for U.S. beans to be limited over the near-term as the country celebrates its lunar holiday next week and South American supplies should soon become more readily available.
Technical analysis: Near-term boundaries for March soybean futures are resistance at this week's high of $14.98 to the December high of $15.01 1/4, while support lies at the October low of $14.57.
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 reversed early losses to end fractionally to 4 cents higher in most contracts at all three locations.
Fundamental analysis: Early pressure in the wheat pit came on spillover from neighboring pits and strength in the dollar index, but as traders began to digest the implications of Russia's decision to lift its 5% import duty, talk that India will free additional government reserve stocks for export and that Brazil will exempt 1 MMT of wheat from import duties, some buying returned. Traders recognize the various trade moves announced recently are the result of tight European and Black-Sea region supplies, which should eventually result in improved demand for U.S. wheat.
Traders will put more focus on evening positions tomorrow, as they prepare for Friday's USDA S&D Report. The report is expected to show carryover up around 12 million bu. from last month to 728 million bu., but for USDA to trim its global carryover projection.
Technical analysis: March Chicago wheat futures posted a fresh weekly low of $7.46 1/2 before recovering to a high-range close to finish 2 cents higher. But futures have a lot of work ahead in order to improve the technical posture of the market. A return above the January high of $7.99 3/4 is needed to signal a near-term low has been posted.
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 two-sided trade and ended at or near session highs with gains of 2 to 21 points in all but far deferred months, which were slightly lower.
Fundamental analysis: Early in today's session, cotton futures were pressured by dollar strength that limited commodity buying interest sector-wide. But some light short-covering interest returned late in the session as traders recognize that export sales data the past few months has reflected consistently solid (if not impressive) weekly sales tallies, with China as the main buyer. There has been talk in recent weeks that the poor quality of Chinese state reserve auction cotton will keep Chinese millers' demand for cotton strong.
Technical analysis: March cotton futures were little changed for the day. Futures left near-term support at yesterday's low of 80.79 cents in place. Thereafter, support is layered at 1-cent intervals from 80.00 cents to 78.00 cents. Strong resistance remains at the January 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.