Price action: Corn futures ended roughly 2 to 5 cents higher through the March 2014 contract. Farther deferred contracts ended steady to around a penny higher.
Fundamental analysis: Corn futures were supported by light short-covering amid ideas recent losses were overdone. Traders also began evening positions ahead of Friday's barrage of reports from USDA. As a result, more light short-covering is possible the next several days. But don't look for traders to actively add new long positions ahead of USDA reports unless there's strong demand news.
USDA announced a daily sale of 102,200 MT of corn to an unknown destination for 2012-13. This indicates some value buying among end-users, although sustained demand is needed to signal prices dipped "far enough."
Technical analysis: December corn futures pivoted around the 200-day Moving Average today after closing below that level Friday for the first time since June. This is a key near-term technical level as many funds use it as a trading signal. If it turns into resistance, it would suggest more near-term price pressure is likely. If the contract quickly recovers above this level, however, it would suggest a short-term low is in place.
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 gains most of today's session and futures rallied into the close to end with gains of roughly 18 to 21 cents the January through July contracts. Farther deferred months saw slightly lighter gains. Soymeal and soyoil futures also ended moderately higher.
Fundamental analysis: A weaker U.S. dollar index and ideas the downside has been overdone in recent weeks returned some short-covering to the soybean market today. Also encouraging some investors to lighten their short positions are the USDA reports slated for Friday. This January release data has frequently resulted in limit moves the past several years.
But as China is soon expected to begin buying beans from Brazil over the U.S. as harvest of what is expected to be a record-large South American crop picks up, upside potential for soybeans is likely limited over the near-term.
Technical analysis: March soybean futures saw an inside day of trade, but the contract's high-range finish should give bulls the advantage in the overnight session. They will target former psychological support at $14.00, followed by last week's high of $14.35. Strong support is at $13.56, which stemmed selloffs in November and last week.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Price action: Wheat futures favored a firmer tone throughout the day, but saw two-sided trade at times. Wheat came off session lows into the close to end mostly 3 to 5 cents higher at all three exchanges.
Fundamental analysis: Early support was tied to short-covering on ideas recent losses were overdone, as well as spillover from neighboring pits. A weakening dollar index was also supportive for the wheat pit today. But the inability of wheat to hold early gains signals traders aren't willing to rush to the long side of the market for now. While export demand has recently improved, export news is still not consistently strong enough to keep futures supported.
Buying was also limited by improved precip chances for the Southern Plains. Weather models continue to show promising rains for areas of Oklahoma and Texas, although lighter tallies are expected in Kansas. See "Evening Report" for more.
Technical analysis: March Chicago wheat futures have slipped into severely oversold territory according to the 9-day Relative Strength Index. The contract is posting a 19% on the index. A reading of 30% or less signals a time or price correction is due. Next important support for the contract lies at $7.26, which marks a 75% retracement of the rally from the May low to the summer high. To signal a near-term low has been posted, futures must climb back above the $8.00 level, which marks the mid-point of the 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 favored a firmer tone in choppy trade and ended near session highs with slight gains.
Fundamental analysis: Futures were supported by spillover from soybeans and a turnaround in the dollar index. The U.S. dollar index started the morning strong, but softened to provide widespread support to the commodity markets.
Otherwise, there wasn't any fresh news for the cotton market to digest, so traders worked to even positions ahead of Friday morning's monthly USDA data. Traders generally expect USDA to trim carryover to reflect recent improvements in the export pace.
Technical analysis: March cotton posted a high-range close, which gives bulls the advantage heading into tomorrow's session. Near-term boundaries are resistance at the December high of 77.10 cents and support at last week's low of 73.72 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.