Price action: Corn futures saw a choppy day of trade, but in the end March through December futures ended 1/4 to 1 3/4 cents higher, with far deferreds ending 1/4 to 3/4 cents lower.
Fundamental outlook: The ability of nearby futures to post a high-range close is a sign the market has posted a near-term low. But given ongoing trade issues with China, traders were hesitant to aggressively add to Friday's strong gains. This morning, USDA announced China purchased 120,000 MT of sorghum for 2013-14. If more purchases of sorghum follow, it would suggest China is looking to replace U.S. corn due to the detection of unapproved GMO material in shipments of corn.
Late-session support came as traders still have Friday's USDA reports on their minds, in which the agency lowered the size of the 2013 corn crop and revealed record first quarter corn use. With March corn closing around 28 cents above Friday's contract low, it could be difficult to sharply add to gains as 2013-14 carryover is still up sharply from year-ago.
Technical outlook: March corn futures posted an upside day of trade on the daily chart, which is a positive sign following Friday's key bullish reversal. But to confirm a low is in place, the contract needs closes above the December high of $4.40 3/4. The contract has completed a 25% retracement of the decline from the August high, making next resistance the 38% retracement level around $4.50.
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 faced pressure overnight, but this gave way to bargain buying and short-covering with the start of the day trading session. Futures ended high-range, with January beans up 23 cents, while deferred contracts were mostly around 14 cents higher.
Fundamental outlook: USDA's higher-than-expected 2013 soybean crop estimate initially pressured the market, but reminders of strong demand eventually led to a reversal and rally. USDA this morning announced a 140,000 MT daily soybean sale to unknown destinations. Weekly export inspections also came in near the top of solid expectations. All of this kept USDA's Friday report reflecting record-high first quarter usage in mind.
The market also benefited from a hot, dry forecast for Argentina this week. Conditions are expected to remain favorable in Brazil, however.
Technical outlook: January soybeans continued in their mild uptrend since the start of the year and posted a bullish reversal on the day. The March contract came within a 1/4 cent of Friday's high and appears poised for a test of tough resistance at $13.00. Tough support for the contract is in the $12.65 area.
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: SRW wheat futures posted gains of 4 1/2 to 6 1/2 cents for the day, which was good for a high-range close. HRW wheat, on the other hand, settled fractionally to 6 1/4 cents lower. HRS ended narrowly mixed after favoring the upside for much of the day.
Fundamental outlook: Wheat futures initially benefited from efforts to correct the technically oversold condition of the market as well as some early signs wheat may have found "value" levels. A number of contracts remain oversold according to both the 9- and 14-day Relative Strength Index, signaling more corrective trade is possible.
In terms of demand improvement, value-buyer Egypt purchased U.S. SRW wheat for the first time in an extended period. Also, export inspections for the week ended Jan. 9 topped expectations and improved substantially from week-ago and year-ago.
However, the posture of the market remains decidedly lower, and USDA's reminder of ample U.S. and global wheat supplies remains fresh in traders' minds.
Technical outlook: SRW March wheat futures spent the day near the midpoint of Friday's steep selloff. The contract must first move above the Jan. 2 low of $5.95 1/2 and $6.00 to signal a near-term low is in the works. Contract-low support is at $5.60 1/2.
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 were stronger throughout the day and ended 79 to 141 points higher, with nearby futures leading gains.
Fundamental outlook: Weakness in the U.S. dollar index was a supportive factor for cotton futures. The market also enjoyed spillover from sharp gains in soybean futures. Traders still have USDA's Friday reports on their minds, but say the data was neutral for the U.S., leading to expectations it is factored into prices. Traders' attention has turned to stronger-than-expected U.S. exports. As a result, traders are anxious to see Thursday's export sales data, which will reveal the post-holiday sales pace.
Technical outlook: May cotton futures posted an upside day of trade on the daily chart. The contract closed off the session high, but still ended in the upper quarter of the trading range. Near-term boundaries are resistance at the early January high of 84.89 cents and support at Friday's low of 82.60 cents.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.