Price action: Corn futures were firmer throughout the day and ended 2 1/4 to 4 1/2 cents higher on help from strength in the dollar and on pre-report position squaring.
Fundamental analysis: Sharp weakness in the U.S. dollar index helped keep corn in positive territory despite a weakening of soybean futures into the close. Traders don't want to be caught too heavily short or long heading into the report, but following the steep price decline in December, traders have opted to cover short positions. Traders look for USDA to trim the size of the corn crop tomorrow morning, but for usage projections to decline to result in a slight increase in carryover from last month. The past six January reports have triggered a limit price move in corn futures -- in either direction -- so traders are preparing for strong price volatility.
Meanwhile, this morning's disappointing weekly export sales report limited buying interest, although traders note corn prices are at levels that should increase demand, as demonstrated by an uptick in ethanol production last week.
Technical analysis: March corn futures posted an upside day of trade on the daily chart and ended just below the psychological $7.00 level. But futures need to return above at least the $7.20 level to signal a near-term low is in place. Support lies at Monday's low of $6.78.
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 saw trade on both sides of unchanged today, but the market ended low-range with losses of 3 3/4 to 7 cents. Soymeal ended with slight losses while most soyoil futures posted slight gains for the day.
Fundamental analysis: At times today, soybeans benefited from short-covering encouraged by stronger-than-expected weekly soybean export sales as well as several daily soybean sales to China and unknown destinations that totaled 587,500 MT. This, along with firmer Gulf basis, may signal bean prices have dipped far enough to attract bargain buying.
But this quickly gave way to profit-taking as traders are unwilling to add risk on either side of the market ahead of the USDA reports tomorrow that have in the past few years consistently sparked big price moves. See "Evening Report" for more.
Technical analysis: Key support for March soybean futures lies at the November and January low of $13.56. A close below that level would open up downside risk to the summer lows. Conversely, strong resistance stands at the December high of $15.01 1/4.
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 saw a choppy day of trade and ended likewise. Chicago wheat ended around a penny lower; Kansas City closed 4 1/2 to 5 3/4 cents lower; Minneapolis wheat settled narrowly mixed.
Fundamental analysis: Wheat futures had a mix of export news to digest. While weekly export sales were disappointing, the fact that Egypt bought 55,000 MT of U.S. SRW wheat today hints that U.S. wheat prices may finally be competitive on the world export market.
But ultimately, traders focused on evening positions ahead of the release of USDA reports tomorrow. Traders expect USDA to trim its 2012-13 carryover estimate slightly to 743 million bu. and for USDA to peg all winter wheat seedings at 42.6 million acres, up 1.3 million acres from year-ago. They also anticipate USDA will cut its Dec. 1 wheat stocks estimate to 1.674 billion bu., from 2.104 billion bu. as of Sept. 1.
Technical analysis: March Chicago wheat remained within the contract's week-long consolidated trading range. Near-term support is at last week's low of $7.39 3/4, followed by the psychological $7.00 level. The January high of $7.88 is initial resistance.
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 strengthened into the close to finish 21 to 72 points higher.
Fundamental analysis: Cotton was supported by a sharp weakening of the U.S. dollar index, which provided widespread support to the commodity world. The Continuous Commodity Index posted sharp daily gains to return above 555.00.
Traders also worked to even positions ahead of tomorrow morning's USDA reports. Traders look for very little change in the size of the cotton crop from last month's estimate of 17.26 million bales, but for carryover to decline due to a recent pickup in the export pace. Traders look for carryover to decline by 210,000 bales from last month to 5.19 million bales.
Technical analysis: March cotton futures briefly penetrated support at yesterday's low before firming into the close. Near-term boundaries are support at last week's low of 73.72 cents and resistance at the December high of 77.10 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.