Price action: Corn futures ended the day mostly 3 to 4 cents lower and ended near the weekly lows. March corn ended the week 8 3/4 cents below last week's closing level, with December posting a 9-1/4-cent loss for the week.
5-day outlook: This week's price action signals traders believe supplies will remain plentiful the remainder of the marketing year. After rising sharply last Friday in reaction to USDA's smaller-than-expected 2013-14 carryover estimate, traders returned this week realizing carryover was still up sharply from the previous year.
30-day outlook: Demand is still in the rebuilding phase, but recent purchases by Egypt signal U.S. corn is a "value" on the global market. But offsetting this is the fact China remains closed for U.S. corn business due to detection of unapproved GMO material and the lengthy process in approving this strain.
90-day outlook: Trader focus during this period will shift more toward 2014 acreage prospects and the corn:soybean price ratio. The price ratio ended the week right at 2.5:1 -- which puts revenue in "equilibrium" for most producers. The market believes this gives soybeans the acreage advantage this spring, due to the desire for rotations after disappointing corn-on-corn yields in recent years.
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 closed fractionally to 2 cents higher and near their daily highs, erasing losses posted in early morning trading. Futures close sharply higher versus a week ago.
5-day outlook: Soybean futures recovered from week-end profit-taking to close firmer. This suggests the market is poised for followthrough strength early next week. The key is how well March futures perform as they press into the large resistance area starting at $13.20. A close above $13.40 is needed to ignite a larger bull move. A turn back down would return prices to their recent trading channel, with $12.80 offering support.
30-day outlook: Traders will be keeping their eyes on transportation issues in Brazil as well as China. China continues to be an active buyer in the U.S. market. However, traders believe the country is lining up supplies as insurance if Brazil once again has difficulties moving its harvest to the export market. Therefore, traders believe China will begin canceling some of its buys once the Brazilian crop leaves that country's ports.
90-day outlook: The movement of a record-large South American crop into world trade channels will eventually exert downward pressure on U.S. prices. As the calendar turns to March, increasing interest will turn to U.S. soybean planting intentions. Traders expect soybean plantings to rise in 2014, which will keep downward pressure on new-crop prices. USDA will provide an update on this March 31. The potential surprise would be if China does not cancel recent U.S. soybean purchases as the Brazilian crop becomes available. Total booked sales, if actually shipped, would mean a downswing in projected carryover stocks to extremely tight levels.
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 ended mostly 7 to 9 cents lower in SRW contracts, 4 to 6 cents lower in HRW contracts and 5 to 7 cents lower in HRS contracts today. For the week, SRW contracts posted slight losses but held above last Friday's lows, while the HRW and HRS markets mildly extended the price slide.
5-day outlook: Attitudes are bearish and the technical picture is weakening. That suggests the market is at risk of additional price pressure next week and the upside is limited to mild corrective buying. To get even a modest price recovery, wheat likely needs help from the corn market, which is also struggling to find buying interest.
30-day outlook: Drought conditions are worsening in Texas and Oklahoma and that was reflected in updated Texas winter wheat crop condition ratings earlier this week. But traders aren't going to get concerned this winter unless conditions sharply decline as the overall condition of the winter wheat crop was strong when it entered dormancy.
90-day outlook: Traders' attitudes could shift this spring if crop ratings take a noticeable hit and drought conditions worsen. But the market needs bullish demand news to fuel an extended price recovery. And that's not likely given plentiful global wheat supplies.
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 21 to 82 points through the December contract today while far-deferred contracts ended slightly lower. For the week, cotton futures posted an upside breakout from the recent consolidation range.
5-day outlook: The positive technical action to close out the week opens the door to followthrough buying next week. But you must be prepared to pull the trigger on additional old-crop sales if March futures are unable to clear tough resistance at last October's highs. Also, be prepared to make initial 2014-crop sales if buying interest runs out of steam.
30-day outlook: Cotton acreage will increase this year, as row-crop returns in the South are much less attractive than year-ago. Informa Economics' survey work suggests producers will plant nearly 11.1 million acres to cotton this year. The National Cotton Council will release its producer survey results at its annual meeting Feb. 7-9.
90-day outlook: Expectations for increased U.S. cotton plantings and decreased Chinese demand have new-crop futures trading at a big discount to front-month futures. But how much will China demand slow? That will be the key to the longer-term price outlook.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.