Price action: Corn futures finished mostly 2 to 4 cents higher today. Corn futures posted solid gains for the week to extend the recovery from this month's lows. But price action was choppy the last half of the week due to demand concerns.
5-day outlook: To build on this week's gains, corn needs a dose of fresh news. Strong country basis levels reflect the tight supply situation, but that is "known" by the market. A pickup in export demand is the missing ingredient that could propel corn futures higher in the near-term. The lackluster export pace suggests high prices are rationing tight 2012-crop supplies.
30-day outlook: Commercial traders have lightened their short exposure to the market. While commercials are not yet holding a net long position, this data shows they have a growing appetite for corn due to still-solid domestic usage.
90-day outlook: The battle for 2013 acres is expected to heat up, but expectations for corn to attract more southern acres could take some of the pressure off of Midwest producers that were discouraged by corn-on-corn yields in recent years. If dry conditions linger into spring, concerns about dry conditions could fuel an early weather rally.
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: Nearby soybean futures faced pressure much the day, but they improved late in the session and ultimately ended roughly 1 to 7 cents higher in all but the March contract, which settled around a penny lower. Soymeal finished with slight losses, while soyoil posted slight gains. For the week, soybeans ended with sharp gains.
5-day outlook: Traders focused on evening positions today, signaling they plan to reevaluate building heat and dryness in Argentina when they return to the markets Tuesday after the Martin Luther King Jr. holiday. If the forecast improves, soybeans will likely continue to move sideways as this week's action indicates strong soy demand is considered factored into prices.
30-day outlook: If dryness builds in either Argentina or southern Brazil, soybeans will likely rally because a record-large South American crop is essential for relieving the supply shortfall created by the U.S. crop. Regardless, downside risk for soybean futures is limited thanks to strong soy demand from China and others.
90-day outlook: Attention will shift to the U.S. planting season during this period. Farmers have indicated they will wait until the last minute to make corn and bean planting decisions; thus, the 2013 acreage mix is very much up in the air.
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 finished mostly 9 to 10 cents higher in Chicago, mostly 5 to 7 cents higher in Kansas City and mostly 2 to 5 cents higher in Minneapolis today. For the week, wheat futures posted moderate to strong gains.
5-day outlook: To build on this week's corrective gains, the wheat market is likely going to need a boost of fresh supportive news. While drought conditions remain an issue in the Plains, some fresh demand news is likely needed to fuel strong gains next week.
30-day outlook: The export pace has picked up recently, but U.S. wheat isn't consistently competitive on the global market. That limits prospects for export business, especially big purchases. And big purchases are what's needed to give the market a strong price pop.
90-day outlook: If the extended weather outlook pans out, the Plains will continue to suffer from drought conditions. Traders aren't overly concerned with poor HRW crop ratings now, but if the unfavorable conditions last into spring, traders would have a reason to build weather premium into the market.
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 settled 14 to 77 points higher in the March through July contracts, while new-crop contracts were 8 to 17 points lower. For the week, old-crop futures finished higher,while new-crop contracts had very little net price movement.
5-day outlook: March cotton futures pushed out above the August high and posted the highest close since May 10. That makes price action early next week critical to the near-term direction for cotton futures. Followthrough buying would confirm an upside breakout from the extended range and signal bulls have secured control of the market. But failure to spark followthrough buying would indicate the breakout attempt was a bear trap.
30-day outlook: Cotton plantings will undoubtedly be down sharply from year-ago as corn, sorghum and soybeans are more attractive options for southern producers. Price action over the next month will determine if cotton futures are going to make a serious push to hold onto as many acres as possible. Recent price gains have been led by old-crop contracts, while buying interest in new-crop futures has slowed at the top of the extended, choppy range.
90-day outlook: If cotton acres decline sharply, carryover for 2013-14 would be projected to tighten to the point where it would be price-supportive. Key would then be whether there's enough demand to sustain a price rally.
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.