Price action: Corn futures faced pressure most of the day and ended mid- to low-range for the day with losses of 1 1/2 to 6 cents in most contracts
Fundamental analysis: Corn futures struggled to find buyers as traders expect tomorrow's weekly export sales report to again reflect dismal demand. Spillover from soybeans, a technical posture that favors market bears and a surge in the U.S. dollar index also deterred buying interest in corn futures.
However, futures' downside should be somewhat limited by historically high basis levels at interior locations -- a reminder that supplies are tight.
Technical analysis: March corn futures continued in their recent downtrend today, but the market did respect key support at the 200-day moving average, which intersects at $6.83 1/2 today. A move through this level would likely trigger another wave of fund selling.
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 were under pressure throughout the day but finished off session lows with losses of 2 to 6 cents. Meal and soyoil saw spillover pressure.
Fundamental analysis: Early pressure was tied to followthrough from yesterday's bearish reversals and strength in the U.S. dollar index. Additional pressure came from news of additional sales cancellations from China, which reminded traders the country will soon begin booking Brazilian supplies as its early harvest has begun in Mato Grosso.
Also, while rains are needed in Mato Grosso to help with bean pod-fill, more rains are forecast across central and southern Brazil this week, maintaining expectations for record production -- even outpacing last year's U.S. soybean crop.
Technical analysis: March soybean futures posted a downside day of trade on the daily chart to confirm yesterday's bearish reversal. Bearish price momentum points to a test of the November low of $13.56. Following that, the next key support is the May low of $12.30.
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: Chicago wheat futures favored a weaker tone into the close and ended 1 1/4 to 5 1/4 cents lower in all but the front-month March contract, that ended 1/4 cent higher. Kansas City wheat ended mostly weaker, with Minneapolis ending 3 to 5 3/4 cents higher amid short-covering.
Fundamental analysis: Early price pressure on Chicago wheat was tied to spillover from neighboring pits and sharp strength in the U.S. dollar index, but ideas recent losses are overdone eventually triggered some short-covering. Additional support came from concerns about winter wheat conditions in the Central and Southern Plains, as this week's drought monitor showed little improvement in the drought despite the recent blanket of snow. There is, however, more precip in the forecast for the region over the next 10 days.
But buying was limited to short-covering as wheat needs a constant dose of export news to interest market bulls. Traders expect tomorrow morning's delayed weekly export sales report to show a dramatic drop in sales the week ended Dec. 27 from the previous week, as business slowed due to the holidays.
Technical analysis: March Chicago wheat futures briefly slipped below support at yesterday's low to $7.49 3/4, which marks new initial support. Initial resistance is at yesterday's high of $7.88. The contract needs to at least return above $8.00, which is near the mid-point of the May to December trading range, to signal a near-term low is in the works.
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: March cotton futures ended 3 points higher, while the May 2013 through May 2014 contracts were 1 to 19 points lower.
Fundamental analysis: Upside potential in the cotton pit was limited by negative outside markets, as the U.S. dollar index surged ahead of what's expected to be a positive employment report tomorrow morning. But traders remain cautiously optimistic about the economy as Congress still has the task of dealing with spending cuts. Meanwhile, pressure on cotton futures was limited ahead of tomorrow's weekly export sales data; demand was solid in December.
Technical analysis: March cotton futures posted an inside day of trade on the daily chart but ended near session lows. Near-term boundaries for the contract are resistance at last week's high of 77.10 cents and support at last week's low of 74.62 cents.
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.