Price action: July corn futures reversed early gains to end 23 3/4 cents lower. September corn futures finished 15 3/4 cents lower. New-crop contracts were 7 1/2 to 9 3/4 cents lower. Corn futures ended low-range for the day.
Fundamental analysis: July corn futures, which were initially supported by tight supplies, dropped sharply this afternoon as traders liquidated long positions in the lead-month contract that's in delivery and also unwound bull spreads. That price action was in part encouraged by weakening basis across the countryside.
New-crop corn futures were pressured as traders continued to digest last Friday's planted acreage forecast from USDA, which showed producers planted more corn acres than intended in March despite very wet conditions and planting delays across the Corn Belt. Weather also weighed on new-crop corn. Traders deem forecasts calling for drier conditions in the western Corn Belt and rain chances in the eastern Belt, along with moderate temps region-wide, as favorable for crop development.
Funds were active on the short side of the market, selling an estimated 14,000 contracts (70 million bu.) today. That follows sales of 25,000 contracts (125 million bu.) on Friday.
Technical analysis: After violating the May low on Friday, December corn futures gapped lower and extended losses today, coming within 1/2 cent of the psychological $5.00 mark. A drop below that level could trigger sell stops and increased chart-based selling. December corn futures are now oversold, registering at 24.82 on the 9-day Relative Strength Index.
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: Soybean futures saw bull spreading throughout the day and ended 5 1/2 to 6 cents higher in old-crop contracts and 5 to 8 3/4 cents lower through the May contract. Most contracts ended low-range. Soyoil posted gains for the day, while meal finished with losses.
Fundamental analysis: Bull spreading in the bean market was encouraged by USDA's reports Friday, along with a more favorable forecast this week. USDA's Quarterly Grain Stocks Report pointed to very tight supplies. That's supportive for basis and old-crop futures.
Also, a drier forecast for the western Corn Belt and rain in the eastern Belt are easing concerns about the 2013 crop for the time being. The market expects USDA's crop condition update to show the amount of beans rated "good" to "excellent" rose 1 point from last week to 66%.
Technical analysis: Followthrough selling in November beans today took the contract through Friday's low, which roughly coincides with the psychological $12.50 area and the February low. The next level of major chart support is at $12.00.
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: Wheat futures were choppy today and ended mixed. Chicago wheat closed 2 3/4 cents lower to 3 cents higher, with Kansas City 2 1/4 cents higher to 2 1/4 cents lower. Minneapolis wheat ended mostly 2 1/2 to 6 1/2 cents lower.
Fundamental analysis: Given highly volatile price action in the corn and soybean markets, today's trade in the wheat market was lackluster in comparison. In the end, Chicago wheat was pressured by spillover from corn futures and followthrough from Friday's losses, while Kansas City wheat saw light short-covering. But it will be difficult for bulls to regain momentum in the wheat pit until price action in neighboring corn and soybean markets stabilizes.
Wheat futures are also dealing with a pickup in seasonal pressure as harvest is progressing quickly across Kansas. But improved demand should help the market to secure a harvest low in the near-term. This morning's weekly export inspections data showed wheat inspections above expectations at 26.52 million bushels.
Technical analysis: September Chicago wheat futures gapped slightly lower on the open and posted a contract low of $6.52 3/4 before filling the gap. The contract ended mid-range and has deepened the oversold condition to suggest a time or price correction is due. But the contract has its work cut out in order to confirm a low has been posted. First, it needs to complete a 25% retracement of the decline from the November high, which currently would be at $7.15 1/2 and then it needs to complete a 38% retracement, which currently corresponds with the March high of $7.46 3/4.
Hedgers: 100% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 100% sold on 2012-crop. No 2013-crop sales advised yet.
Price action: Cotton futures closed 124 to 158 points higher through the December 2014 contract. Cotton futures ended near session highs.
Fundamental analysis: Cotton futures favored the downside for much of today's session, but selling interest dried up late and speculative buying pushed prices sharply higher. Following recent price pressure, there was also talk of commercial buying entering the market.
Traders are also concerned about the crop. While USDA reported cotton plantings were up from March intentions, acreage is still down sharply from year-ago. Plus, drought is a concern as some areas of the Southwest are experiencing record heat.
Technical analysis: December cotton futures posted a bullish reversal today after moving into the lower end of the recent, broad trading range. Followthrough buying tomorrow is needed to confirm a short-term low. If a low is confirmed, the upside target is the 89.00-cent area.
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.