Price action: Corn futures closed high-range with gains of mostly 2 1/2 to 4 1/4 cents.
Fundamental outlook: Mild short-covering supported corn futures today as traders prepare for Friday's barrage of USDA reports that will include updated Supply & Demand tables, USDA's final 2013 corn crop forecast and Dec. 1 corn stocks. Given persistent price pressure, it wouldn't be shocking to see traders cover more short positions ahead of Friday. Funds were buyers of 5,000 contracts (25 million bu.) of corn today, but are still holding a sizable net short position. In addition, index funds are rebalancing their portfolios for this year.
Additional support today came from a heat wave that's forecast across Argentina's main grain production area the next several days. The corn crop is more at risk than soybeans, though traders have historically been less responsive to South American corn crop threats.
Technical outlook: After dropping to a new contract low Friday, March corn futures must string together several days of corrective gains to give any indication a short-term low may be in the works. The December high at $4.40 3/4 is key near-term resistance.
Hedgers: 25% of 2013-crop production is sold in the cash market. Be prepared to advance sales on an overdue bounce.
Cash-only marketers: 25% sold on 2013-crop. Be prepared to advance sales on a bounce.
Price action: Soybean futures traded higher in the front months throughout the session and closed high-range. Deferred contracts worked lower as a result of bull spreading and closed near their lows. Nearby futures finished 1/2 to 7 1/2 cents higher in the front five contracts, with January leading gains; deferreds closed 1 1/4 to 3 3/4 cents lower.
Fundamental outlook: Soybean futures started the day working higher in corrective short-covering following last week's losses. Some buying support came as weather forecasts for Argentina again turned hot and dry, but that support was limited as the trade continues to expect a record-large harvest out of South America. Nearby futures gained additional support from today's strong weekly export inspections report, which came in above expectations and nearly 13 million bu. higher than the previous week. Slight weakness in the U.S. dollar index also lent support to the front month contracts.
Traders actively bull spread the market today as they looked forward to a rise in 2014 soybean supplies on increased plantings.
Technical outlook: January futures saw a second day of gains following the chart damage inflicted on Jan. 2. This adds some weight to the strength of the $12.80 area as a support zone. There is additional support around $12.60. But the Jan. 2 plunge penetrated the August/November uptrend line. Friday, while slightly higher, marked a second close under the line. Today's finish is right on the line. Tuesday's trade will be critical, as it will either confirm the strength of the uptrend line as rising support or confirm the break in that uptrend.
Hedgers: 100% sold in the cash market on 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: 75% sold on 2013-crop production.
Price action: Wheat futures enjoyed gains overnight and early this morning, but this gave way to some late profit-taking. The market ended steady to a penny lower in the SRW and HRS wheat markets, while HRW wheat finished split with nearbys around a penny higher and deferred months marginally lower.
Fundamental outlook: Wheat futures were initially supported by some followthrough corrective buys as the market began making an overdue price correction last week. In addition, extreme cold on the Plains and Midwest raised winterkill concerns, especially since snowcover is thin or patchy in some areas. Some private crop watchers report 15% of the crop may have sustained significant damage. A long-absent daily sales announcement by USDA to unknown destinations added to the positive tone.
But another lackluster tally in the weekly export inspections report returned light profit-taking to the market. Inspections of 13.601 million bu. met expectations, but these were already on the low-side.
Technical outlook: March SRW wheat futures settled low-range after spending much of the day in positive territory. But the contract did respect key support at $6.00. It must move above the $6.50 area to signal a low is in place.
Hedgers: 75% sold on 2013-crop in the cash market. No 2014-crop sales are advised.
Cash-only marketers: 50% sold on 2013-crop. No 2014-crop sales are advised at this time.
Price action: Cotton futures faced pressure at times today, but bulls had the advantage at the close. The market ended high-range with gains of 38 to 81 points. Nearby contracts led gains.
Fundamental outlook: The cotton market benefited from news Chinese farmers are expected to plant just 10.5 million acres this year, which is roughly a 9% decline from the year prior, according to the latest survey by the China Cotton Association. However, this figure is subject to change as farmers are still waiting for the Chinese government to announce its official policy on cotton before finalizing any decisions. The country has indicated it will likely abandon its stockpiling program in favor of direct farmer subsidies.
China stockpiled 5.01 MMT of cotton in 2013, the association detailed. This is down from 6.5 MMT last year. The country's stockpiling efforts made domestic prices less competitive than imported supplies.
Technical outlook: March cotton futures finished just shy of psychological resistance at 84.00 cents today, after which resistance stands at the December high of 85.29 cents. Support is tightly layered between the June low of 81.94 cents and the Dec. 23 dip to 81.42 cents.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.