Price action: Corn futures extended gains into the close on spillover from sharp gains in the soybean market to post bullish reversals in most contracts. The March through July contracts ended 10 3/4 to 11 1/2 cents higher, with deferred futures up mostly 6 cents.
Fundamental analysis: Corn started the overnight session weaker on a lack of fresh news, but early this morning, focus turned to the South American weather situation. Concerns about hot and dry conditions in Argentina and southern Brazil damaging filling corn helped to support prices, as well as slow grain movement, giving a boost to basis.
Outside markets were also supportive of commodity buying, as the U.S. dollar index sank on disappointing 4th-qtr. GDP data (see "Evening Report" for more).
Technical analysis: March corn futures posted a bullish reversal and a high-range close -- even posting a fresh monthly high. Followthrough buying tomorrow would confirm today's bullish reversal and make the next upward target the November high of $7.67 1/2. Support lies at last week's low of $7.14 1/2.
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 enjoyed solid followthrough buying overnight and the market strengthened as the day progressed. Futures ended high-range and 20 to 28 cents higher through the November contract. Soymeal and soyoil futures enjoyed strong spillover support.
Fundamental analysis: Soybean futures saw support from both market fundamentals and technical buying today. The market received a boost from a drier weather model for Argentina, and forecasts for heat and dryness to linger in southern Brazil. While both these regions are expected to see showers this weekend, coverage is expected to be spotty and totals relatively light. Plus, China bought another 175,000 MT of new-crop beans, reminding the market of its seeming insatiable appetite for beans.
This supportive news pushed futures through key levels of resistance, accelerating technical buying. Key will be if the market sees followthrough buying tomorrow.
Technical analysis: March Chicago wheat futures hit a new monthly high of $14.81 3/4 today. This is initial resistance, followed by the December high of $15.01 1/4. Former resistance at last week's high of $14.60 3/4 is now support.
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 spent most of the day in positive territory and futures ended high-range with gains of 5 3/4 to 10 cents in Chicago, while Kansas City was around 10 cents higher. Minneapolis settled mostly 6 to 8 cents higher for the day.
Fundamental analysis: Wheat futures enjoyed strong spillover support from corn and soybeans along with a weaker U.S. dollar index today. The market also benefited from some fresh supply news. Russia's head weather forecaster says 9.5% of the winter wheat crop is in "poor" condition, which is an improvement from 2012 but above the five-year average. Plus, the British farm ministry reports its wheat import needs for 2012-13 will rise to 2.19 MMT from 908,000 MT the previous marketing year.
And while recent rains were very welcome across the U.S. Southern Plains, much more will be needed to ease the severe and expansive drought across the winter wheat country.
Technical analysis: March Chicago wheat futures settled high-range and in the upper half of the consolidation range that has bound action recently. The January high of $7.99 3/4 and last week's low of $7.63 mark the parameters of this trading range.
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 firmed into the close, but still finished narrowly mixed.
Fundamental analysis: Futures were supported by weakness in the U.S. dollar index, but they saw a late-session boost from the rally in the grain markets. As soybean futures moved 20-plus cents higher, cotton responded as it has the task of competing for acres this spring. Traders also didn't want to be caught short ahead of tomorrow's weekly export sales data given the recent uptick in demand.
Technical analysis: March cotton futures posted an inside day up on the daily chart. The high-range close gives bulls the upper hand heading into tomorrow's open. Initial resistance stands at last week's high of 84.00 cents. Next key resistance is at the 62% retracement of the decline from the February 2012 high to the June low, which is near 86.40 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.