Price action: Corn futures faced pressure for much of the session and ended just off session lows with losses of 6 1/4 to 9 cents.
Fundamental outlook: With the corn crop nearing its key pollination period, market attention is squarely on the weather. Overnight and midday weather updates gave greater chances for rain in the Midwest during the 6- to 10-day period and cooler temps are expected to move into the Corn Belt this week, hopefully giving the crop a needed respite from hot, dry conditions.
This set the stage for profit-taking today. A decline in Gulf basis this morning and strength in the U.S. dollar index added incentive for traders to take some profits out of the market today. But basis at some interior locations is said to be ticking up amid strong ethanol demand for a tight supply of corn. Ethanol production declined from last week, however.
Technical outlook: December corn again tested but respected strong support in the $5.00 vicinity. Limited downside risk likely exists below this level as such dips have been met with strong end-user buying. Near-term resistance stands at the July high of $5.28 1/4.
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 traded in a relatively narrow range today, staying inside of Tuesday's boundaries. The August contract closed up 2 1/4 cents and near the highs of the day. New-crop contracts posted mid-range closes, with the November through August 2014 contracts 1 1/4 to 2 3/4 lower for the day.
Fundamental outlook: News of another daily soybean sale of 165,000 MT of new-crop U.S. soybeans to China limited selling today, though new-crop futures saw some pressure from changing weather forecasts suggesting more precipitation is due the Midwest in the 10-day window. Above-normal precipitation and normal temperatures are expected next week. But some traders are reluctant to pressure new-crop futures due to the very slow development of the western Corn Belt crop.
Technical outlook: New-crop futures continue to trend sideways with the November contract needing a close above $13.00 to spark fresh chart-based buying. Meanwhile, that contract continues to show support around $12.50. Today marks the second consecutive close above the 200-day Moving Average for the November contract, though previous price action above this mark has failed to attract active buying interest.
The August contract needs to close above Tuesday's high of $14.88 to reconfirm the spring uptrend. That contract has support at Monday's low at $14.19 1/2.
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: After a choppy to mostly firmer tone through the morning hours, wheat futures faded late to close under light pressure. Chicago futures ended mostly 3 to 5 cents lower, Kansas City wheat finished mostly 1 to 5 cents lower and Minneapolis wheat settled mostly 4 to 7 cents lower.
Fundamental outlook: Traders' hopes for export demand are improving as China continues to actively shop for wheat and there has been a pickup in tenders recently. While the U.S. isn't getting much of that business yet, as global importers search for cheaper supplies, there's hope the increase in wheat demand could eventually lead to a pickup in U.S. wheat exports. That should help shore up support under the market.
With a flurry of demand for U.S. wheat, however, there isn't likely enough support to fuel a sustained price rally. That will be especially true if the corn market struggles. Spillover pressure from corn today led to the low-range close in wheat futures.
Technical outlook: September Chicago wheat futures are struggling to pull away from the contract low at $6.52 1/4. That is key near-term support. Initial resistance is at last week's high of $6.93. That level must be cleared to break the pattern of lower highs that's been in place since last November.
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 closed 56 to 119 points lower through the March 2015 contract, which was low-range for the day.
Fundamental outlook: Forecasts calling for rains across key production areas of Texas are reducing concerns with the cotton crop, which weighed on futures today. But selling was kept in check as traders' concerns aren't completely eased.
The other source of pressure today was tied to concerns Chinese demand for cotton may be slowing. June Chinese cotton imports dropped 22% from May and were down 43.3% from year-ago. Domestic mill demand is also lacking.
Technical outlook: December cotton futures are inching closer to the bottom of the broad, choppy range. Near-term support is at the June 25 low at 83.05 cents. Stronger support is at the June low of 81.72 cents. Violating that level would open sharp downside risk.
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.