Price action: Corn futures ended slightly off session highs with gains of 17 to 21 1/2 cents in the September through July 2013 contracts. Far-deferred contract months posted gains the 9- to 12-cent range.
Fundamental analysis: Focus remains on the weather, with traders showing their disappointment with weekend rainfall by moving futures higher today. Traders expect the crop to continue to wither this week as there's little rain in the near-term forecast and above-normal temps are expected to stay around.
This morning's weekly export inspections data showed corn inspections above expectations at 21.438 million bu. and Gulf corn basis improved. This helped corn post a solid close.
Technical analysis: December corn hit buy stops on the move above $8.00 in early overnight trade. Today's high of $8.17 3/4 is initial resistance, with bulls' next target at $8.25, followed by the psychological $8.50 level. Initial support lies at last week's high of $8.00.
Hedgers: 100% sold on 2011-crop in the cash market. 40% of expected 2012-crop production is covered in Dec. $6.50 put options for 31 1/2 cents. 35% cash forward sold on expected 2012-crop production -- 25% for harvest delivery; 10% for March 2013 delivery.
Cash-only marketers: 100% sold on 2011-crop. 35% forward priced on expected 2012-crop production -- 10% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery.
Price action: Soybean futures finished mostly 35 to 45 1/2 cents higher today, which was just slightly off session highs.
Fundamental analysis: Weekend rains were disappointing as coverage was spotty and amounts were lighter than hoped for across the Corn Belt. Additionally, the forecast offers very little hope of meaningful relief during the first half of August. As a result, traders actively built premium into the market amid concerns crop prospects will continue to fade.
While the corn market has flashed signs high prices are starting to slow demand, that hasn't been the case yet in soybeans. With crop prospects declining, traders must find a price that slows the demand pace and rations supplies.
Technical analysis: Despite today's strong gains, November soybean futures finished well below the contract high at $16.91 1/2, which was posted last Monday. That level is initial resistance, followed by the psychological $17.00 mark. To the downside, last week's low at $15.36 is initial support, followed by the July 5 gap from $14.93 to $14.78.
Hedgers: 100% sold on old-crop in the cash market. 25% of expected 2012-crop production is covered in Nov. $14.00 put options for 42 3/8 cents. 50% of expected 2012-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 50% sold on expected 2012-crop production for harvest delivery.
Price action: Chicago wheat futures ended 1 1/2 to 16 1/2 cents higher, with the September through March 2013 contracts posting double-digit gains. Kansas City wheat finished mostly 7 to 11 cents higher. Minneapolis wheat posted gains of mostly 4 to 8 cents.
Fundamental analysis: Chicago wheat futures paced gains in the wheat market thanks to strength in the corn market. Traders are also concerned with crop prospects in the Former Soviet Union due to drought in key production countries. But make no mistake, the primary price driver for wheat is the corn market as that's attracting speculative money to the market and SRW wheat supplies will be used as a substitute for tight corn supplies.
Buying interest was harder to come by in Kansas City and Minneapolis given strength in the U.S. dollar index. Strong spring wheat crop prospects also limited buying in nearby Minneapolis wheat futures, although a high-yielding, high-quality US spring wheat crop should strengthen export demand.
Technical analysis: Key near-term trading boundaries for September Chicago wheat futures lie at the last week's low and high at $8.52 3/4 and $9.47 1/4, respectively.
Hedgers: 75% cash sold on 2012-crop for harvest delivery. 100% sold on 2011-crop in the cash market.
Cash-only marketers: 75% of 2012-crop production is sold for harvest delivery. 100% sold on 2011-crop.
Price action: Cotton futures were choppy today, but ended 9 to 28 points lower, which was a mid- to low-range close.
Fundamental analysis: Strength in the U.S. dollar index made it difficult for cotton futures to rally, although pressure was limited by general strength in the commodity sector, and the grain markets, in particular. But cotton has been reluctant to follow corn and soybeans higher due to expectations global supplies will be plentiful.
Traders have little concern about crop prospects in the mid-South despite the ongoing drought, as condition ratings remain well above those of a year-ago.
Technical analysis: December cotton futures continue in the month-long consolidation range, with resistance at the July high of 73.40 cents and support at the July low of 69.40 cents. Futures need closes above the June high of 74.80 cents to signal an extended price recovery has begun.
Hedgers: 100% sold on old-crop in the cash market. 50% priced on expected new-crop production via cash forward contract for harvest delivery.
Cash-only marketers:100% sold on old-crop. 50% priced on expected new-crop production via forward contract for harvest delivery.