Price action: Corn futures closed low-range with losses of 5 3/4 to 7 1/2 cents.
Fundamental analysis: Corn futures gapped higher on the open on support from outside markets as the stock market was sharply higher and the dollar was under heavy pressure after the U.S. narrowly averted going over the fiscal cliff. But the euphoria quickly ended in the corn market and futures turned lower amid technical-based selling. Funds opened the new year on the sell side, dumping an estimated 8,000 contracts (40 million bu.) of corn today.
Technical analysis: March corn futures narrowly avoided a bearish reversal today after a gap-higher open. The December low of $6.87 1/2 is key near-term support, as a drop below that level would likely trigger sell stops and consecutive lower closes below that support would give bears momentum to fill the July 5 gap at $6.83 1/2 and to retrace 50% of the rally from the June low to the contract high around $6.81.
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 highly volatile trade today, surging on the open to post gains in the teens and then quickly reversing course. January through August futures ended with losses of 12 3/4 to 17 1/4 cents. Soymeal ended sharply lower; soyoil posted strong gains.
Fundamental analysis: Early support came from bullish enthusiasm about the fiscal cliff being averted and a reactionary move to add risk. But this quickly faded and selling picked up as the U.S. dollar index moved into positive territory. Funds were net sellers today, dumping an estimated 5,000 contracts (25 million bu.) of soybeans . Funds also sold an estimated 4,000 contracts of soymeal.
Unwinding of the long soymeal/short soyoil spreads added pressure. This was spurred by a fiscal cliff provision for a biodiesel tax credit for 2012 (retroactive) and 2013. Pressure also stemmed from favorable growing conditions in South America and the start of early planted soybean harvest in Mato Grosso, Brazil. These supplies will soon compete with U.S. soybeans for export business.
Technical analysis: March soybean futures posted a bearish reversal today, setting the contract up for a test of support at the November low of $13.56. A corrective bounce would have bulls eyeing 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 faced heavy pressure today and ended with losses in the upper teens to low 20s in Chicago and Kansas City, while Minneapolis wheat finished 22 1/2 to 24 cents lower for the day.
Fundamental analysis: Wheat futures were the downside leader in the grain and soy markets today. The market's inability to find buying interest despite a strong risk-on attitude in the stock market in reaction to the fiscal cliff deal signals traders are still waiting on "proof" U.S. wheat is attractive on the global export market. In the meantime, the market will continue to trend lower in search of "value" levels. The upside reversal in the U.S. dollar added to pressure on wheat.
Also, it is too early in the season for the market to get excited about drought conditions and the production implications for winter wheat country.
Technical analysis: March Chicago wheat futures posted a bearish reversal today. Key near-term support is at the May high of $7.54 1/2. Closes below that level would open downside risk to the May low of $6.52.
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 closed 22 to 123 points higher. Old-crop contracts ended mid- to low-range, while new-crop futures closed high-range.
Fundamental analysis: Cotton futures were able to firm despite pressure on grains and the upside reversal in the dollar today. New-crop contracts led price gains amid expectations cotton acreage will decline sharply this year.
Technical analysis: Near-term support and resistance for March cotton futures stand at 74.62 cents and 77.10 cents, respectively. A push above the top end of that range would point the contract to a test of stronger resistance at 78.00 cents. A break below the lower end of that range would suggest a short-term top is in place.
Hedgers: 50% priced on expected 2012-crop production via cash forward contract for harvest delivery. A breakout from that range is needed to spark a trending move.
Cash-only marketers: 50% priced on expected 2012-crop production via forward contract for harvest delivery.