Price action: Corn futures ended low-range for the day with losses of 15 1/4 to 17 3/4 cents through the July 2014 contract. Nevertheless, the market posted strong gains for the week.
5-day outlook: Traders shifted their focus to the weather this week as some of the crop is reaching its key production phase and the weather pattern has turned drier in recent weeks. Forecast updates on Monday will likely be key to action next week. Also, active Chinese buying of U.S. corn gave the market price support.
30-day outlook: The slow planting of the corn crop this spring means much of the crop will be pollinating into the last two weeks of July and the first two weeks of August, keeping attention on temps and precip for the next month. But for the market to extend current gains, recent value buying by exporters will need to be sustained at higher prices.
90-day outlook: The delayed development of the the corn crop means a late fall is needed. Whether this occurs and harvest results will drive market action. Unless the weather is near ideal, we expect poor yields in Iowa and Minnesota to "surprise" the market and lift prices.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybeans futures opened weaker, gradually eroded throughout the day and the collapsed at the close. July futures expired 27 cents lower. August closed down 44 cents. September and later futures closed 29 to 34 cents lower.
5-day outlook: Traders will take their cues from weather forecasts and export demand next week. They will watch for export sales announcements from USDA to see if today's price plunge again attracts demand as it has previously. Meanwhile, growers are becoming increasingly concerned about dry top soil conditions across the western Midwest where the crop went in the ground very late and growth is delayed. But with two-thirds of the crop rated "good" to "excellent," it will be hard to convince traders of any potential problems.
30-day outlook: Weather will become increasingly important as the calendar flips to August -- traditionally the critical month for determining soybean yields. Timely precipitation and moderate temperatures will be critical to development of this late crop. In addition, old-crop supplies remain tight so any surge in demand could lever prices up quickly. The key will be if buyers decide to wait for the arrival of the new-crop rather than chase tight old-crop supplies.
90-day outlook: USDA reminded traders Thursday that old-crop supplies remain tight. But that is old news. It's also old news that an increase in supplies is coming with the new crop. The key is how large that increase will be. If weather cooperates, look for buyers to go hand-to-mouth on needs. But buyers could become more aggressive if August temperatures soar and precipitation fails.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 20% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Chicago wheat futures closed 2 to 4 cents lower today, while Kansas City and Minneapolis wheat finished mixed with a downside bias. But for the week, wheat posted corrective gains.
5-day outlook: Recent, strong Chinese purchases of U.S. SRW wheat, an easing of harvest-related pressure and a friendlier domestic and global ending stocks situation suggest the wheat market has put in a low. But wheat still doesn't have the strength to rally on its own. If the corn and soybean markets don't lead the way, the upside will be limited to corrective buying.
30-day outlook: USDA's first estimate of the spring wheat crop came in slightly higher than anticipated despite concerns with delayed crop development in North Dakota. But with 79% of the North Dakota spring wheat crop rated "good" to "excellent" it will be hard to get traders concerned about crop development delays in the state.
90-day outlook: Demand is the longer-term key to the wheat market. With domestic and global carryover pointed down year-over-year, there is an opportunity for increased U.S. wheat exports. But the Black Sea region will have more wheat to sell onto the global market, especially Russia.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop sale is sold. 100% sold on 2012-crop.
Price action: Cotton futures extended yesterday's losses in early trade, but this gave way to some corrective short-covering ahead of the weekend to result in a narrowly mixed close. October futures finished moderately lower for the week while December through March futures ended near steady with week-ago.
5-day outlook: Cotton futures will likely continue to chop within the wide range that has bound action since June, as dips to the 84 to 85 cent area have been met with value buying. Traders will watch Monday's crop condition update for near-term direction. Some areas of the South are woefully dry, which resulted in a 3-point slide in the amount of the crop rated "good" to "excellent" last week. Development also lags the average pace by a significant margin.
30-day outlook: The market will continue to watch drought and weather updates in the South for signs as to how the relatively small U.S. cotton crop is faring. Weekly export sales will also be monitored as a gauge of demand. Recent tallies have been light and USDA in its Supply & Demand Report Thursday trimmed its export forecast for the current marketing year.
90-day outlook: But while production concerns exist in the U.S., 2013-14 global cotton carryover is projected to be record-large at 94.34 MMT. This means demand for U.S. supplies will be key to preventing a price slide. The economic health of the No. 1 cotton importer China will therefore remain in focus.
Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery. 100% sold on old-crop in the cash market.
Cash-only marketers: 85% sold on old-crop. 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.