Price action: Old-crop corn futures were stronger today amid bull spreading, but still finished slightly lower for the week. New-crop futures posted slight losses today and moderate to sharp losses for the week.
5-day outlook: Old- and new-crop futures were pressured this week by USDA data. USDA raised its old-crop carryover projection and lowered its new-crop carryover projection, but both figures came in above traders' expectations and alleviated some concerns about late planting. USDA trimmed 1.5 bu. per acre from its new-crop yield projection, and traders view weather conditions as "favorable" for the developing crop. Meanwhile, producers in the central and upper Midwest are concerned about uneven emergence, drenched soils and the delayed start of this year's crop.
30-day outlook: For now, traders' perception is that "rain makes grain," but if too-wet conditions continue to put pressure on crop condition ratings, comparisons to years that corn yields were well below the trendline due to too much rain will begin to generate some buying interest. For now, the delayed start to the crop is helping to limit pressure on new-crop futures.
90-day outlook: Traders are also focused on expectations for a sizable recovery in global corn stocks in the year ahead. USDA currently projects 2013-14 global carryover to be up 22% from the current marketing year.
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: Soybean futures fought back from earlier losses to end 1 to 7 1/4 cents higher through the September contract. New-crop contracts closes 2 1/4 to 3 1/2 cents lower, which was well off earlier lows. New-crop futures led the price decline this week.
5-day outlook: Traders feel weather conditions have turned favorable as temps warmed and the sun finally came out. But that attitude could change again as there is more heavy rain in the forecast for the wettest areas of the Corn Belt over the weekend and next week's outlook also calls for multiple rain chances.
30-day outlook: USDA will give us a better indication of planted acreage in the Acreage Report on June 28. But with some planting decisions still uncertain as USDA wraps up its survey work, this will not be the final answer. Still, once traders have a better handle on acreage, they will focus much more on weather and production potential.
90-day outlook: The late start to the growing season will undoubtedly have some impact on yields. As a result, USDA's record yield projection of 44.5 bu. per acre is likely to decline. Still, August weather and when the first killing freeze ends the growing season will be the primary deciding factor on yield.
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 faced pressure for most of the day and the market ended roughly 4 to 6 cents lower in Chicago, mostly 8 cents lower in Kansas City and 8 to 10 cents lower in Minneapolis. Wheat futures posted slight to moderate losses for the week.
5-day outlook: Trading partners continue to await a rapid GMO testing kit from USDA. While no other GMO wheat has been found via extensive testing, this remains a wet blanket on export demand and the futures market.
30-day outlook: Harvest is picking up in the Plains and related hedge pressure will continue to weigh on the market until harvest is near complete. While U.S. HRW production is down significantly this year, the market is not all that concerned as global supplies are seen as ample.
90-day outlook: Wheat could eventually benefit from spillover support from corn as that crop is off to a poor start, increasing the risk of a weather scare down the road. Otherwise, buying interest will likely remain limited unless the global production situation is altered significantly. A few forecast models say the development of a La Nina situation this summer is possible, but most models anticipate a continuation of ENSO-neutral conditions.
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 extended strong weekly gains today, though some late profit-taking resulted in a mixed finish for the day.
5-day outlook: The cotton market surged this week in anticipation of and confirmation of USDA's cut to both old- and new-crop cotton carryover. USDA anticipates stronger domestic and export demand for old-crop supplies and it reduced its harvested acreage projection for 2013. This will limit selling interest in the cotton market for the time being.
30-day outlook: USDA will provide the market another look at cotton acreage at the end of June, keeping supply concerns in mind. But countering this is the agency's forecast for record-large global ending stocks in 2013-14, which will temper bullish enthusiasm.
90-day outlook: Drought remains entrenched in the Southwest U.S., and this will remain an underlying source of support for the cotton market. But continued strong demand will be needed to spur continued gains. China will be key on that front as it is the world's largest cotton consumer. USDA forecasts Chinese cotton imports to decline by 45% in 2013-14.
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.