Price action: July and September corn futures ended around 8 cents lower for the day, while new-crop futures were mostly around 13 cents lower for the day.
Fundamental analysis: Selling in the corn market picked up on the release of bearish USDA report data, but the market absorbed this news relatively well thanks to ideas USDA's acreage projection will come down in subsequent reports. USDA's old- and new-crop carryover projections of 769 million bu. and 1.949 million bu., respectively, topped expectations.
USDA did lower its 2013 national average corn yield projection by 1.5 bu. to 156.5 bu. per acre, reminding traders of the poor start to the growing season. More rain in the Corn Belt today likely squelches hopes of getting unplanted acres seeded or making replant progress.
Weekly ethanol production slid marginally from the week prior to 884,000 barrels a day, while ethanol stocks fell 400,000 barrels to 16 million barrels last week.
Technical analysis: Intraday action in December corn futures closed the May 28 upside gap today, though the contract ended slightly above this level of support at $5.36 3/4. A break through that level would open downside risk to the 2013 low of $5.12.
Hedgers: 100% sold on 2012-crop in the cash market. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery
Cash-only marketers: 75% sold on 2012-crop production. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Price action: Front-month soybean futures ended 1/4 cents higher, with August and September ending 5 1/2 and 7 cents lower, respectively. The rest of the market ended 8 3/4 to 13 1/2 cents lower amid bull spreading.
Fundamental analysis: Traders' initial reaction to USDA's data this morning was negative, largely due to spillover from the corn market. But USDA's report was slightly positive for the bean market, as it left old- and new-crop carryover unchanged. Traders expected USDA to raise its new-crop carryover peg slightly to reflect some corn acres being switched to soybeans.
While new-crop soybean futures posted a mid-range close, buying was limited by the attitude that "rain makes grain." Another wave of storms is moving across the Corn Belt today and is delaying remaining soybean planting, although this is not a big concern for the market at this point.
Technical analysis: November soybean futures briefly traded above resistance at yesterday's high and posted a weekly low; the contract ended mid-range and just above yesterday's close. Today's low of $12.99 marks initial support. The fact soybean futures spent little time below $13.00 signals this is a technically significant level.
Hedgers: 100% sold on 2012-crop in the cash market. 20% forward priced on expected 2013-crop production for harvest delivery. 50% of expected 2013-crop production is hedged in November soybean futures at $12.19.
Cash-only marketers: 90% sold on 2012-crop. 20% forward priced on expected 2013-crop production for harvest delivery.
Price action: Wheat futures ended 13 3/4 to 15 cents lower in Chicago, mostly 13 to 16 cents lower in Kansas City and mostly 9 to 10 cents lower in Minneapolis. That was a low-range close at all three exchanges.
Fundamental analysis: Wheat futures reacted negatively to USDA's report data, as USDA's winter wheat crop estimate was bigger than anticipated and the old- and new-crop carryover figures came in higher than anticipated. Spillover pressure from corn also played a role in today's price pressure.
With harvest underway in the Southern Plains, it will be hard for the wheat market to generate near-term buying interest. But while market bulls haven't been able to generate any momentum, they have kept bears from getting a strong upper hand.
Technical analysis: Support for July Chicago wheat futures lies initially at the May low of $6.74 and then at the April low of $6.64 3/4. A breakdown at that level would suggest the contract is ready to move the next leg lower on the daily price chart.
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 posted strong gains today, ending 139 to 289 points higher through the December 2014 contract.
Fundamental analysis: USDA's report data sparked a strong price reaction as the old- and new-crop carryover forecasts were cut by 400,000 bales each. With new-crop ending stocks now projected to tighten to 2.6 million bales, traders covered more short positions they built this spring.
USDA opted to cut 300,000 acres from its cotton harvested acreage projection as the agency expects greater abandonment of planted acreage in the Southwest due to persistent drought.
Technical analysis: December cotton futures posted a bullish reversal today and also closed above the May high at 87.25 cents, which was the last reaction high. The contract now appears headed for a test of March high at 89.20 cents. A push above that level would make the April 2012 high at 90.81 cents bulls' next target.
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.