Price action: Corn futures ended 4 3/4 to 11 3/4 cents higher amid bull spread unwinding. New-crop futures posted a high-range close on concerns about lagging crop development. Funds bought 11,000 contracts (55,000 million bu.) of corn today.
Fundamental analysis: Warmer temps across the Corn Belt are giving the corn crop a boost, but with above-normal temps in the forecast the next 10 days, traders are nervous weather conditions could turn unfavorable given the shallow root establishment of the crop.
Our weighted Crop Condition Index reflected slight improvement in the crop over the past week due to gains in Illinois and Minnesota, but Iowa and Indiana ratings declined from last week. See "Evening Report" for more crop details from Dr. Michael Cordonnier, as well as a link to the "Greenness" maps that reflect crop stress.
Meanwhile, Gulf basis for immediate delivery surged by 10 cents at midday to stand 95 cents over July futures to reflect tight supplies and the possibility of some fresh demand. But traders still opted to unwind bull spreads.
Technical analysis: December corn futures posted a big upside day of trade on the charts. This is especially impressive as it follows yesterday's bullish reversal. Bulls' next upside objective is the June high of $5.73 1/2. Moving above that level would make the $6.00 area bulls' next target.
Meanwhile, July corn futures filled the April 1 gap at $6.76, but this virtually stopped the day's rally. The contract still posted an upside day of trade on the charts and the highest close since March 28, but needs a close above today's high at $6.77 1/4 to open additional near-term upside potential.
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 spent most of the day session in positive territory, but futures settled low-range for the day, with the July contract 1 3/4 cents lower, September fractionally higher and September through January 3 1/2 to 4 1/4 cents higher.
Fundamental analysis: Soybean futures benefited from news of another new-crop bean buy by China as well as from USDA's confirmation of slow soybean planting and development yesterday. Plus, the forecast for more rain this week and the next could lead to additional slow development and possible quality deterioration.
But some midday weather updates call for just scattered showers across the northern Corn Belt this week, which could help farmers get the estimated 11.6 million unplanted soybean acres seeded. This encouraged some late profit-taking.
Technical analysis: July soybean futures continue to chop between the June high and low of $15.58 3/4 and $14.90, which act as resistance and support, respectively. The wide spread signals much uncertainty about the 2013-14 growing season.
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 closed 6 to 7 cents higher in Chicago, which was in the upper half of today's range, but off session highs. Kansas City wheat ended mostly 4 to 5 cents higher, which was a mid-range close. Minneapolis wheat faded late to end mixed with most contracts 1 to 2 cents lower and near session lows.
Fundamental analysis: The bulk of today's price strength in wheat came via spillover support from corn and soybeans, which triggered short-covering in wheat. While there was some talk that harvest delays and the slower-than-normal harvest pace was supportive, gains were largely corrective in nature. Wheat futures face an uphill battle in the coming weeks as harvest ramps up and with the GMO wheat situation continuing to hang over the market.
Minneapolis wheat futures ran out of steam late. While there are still concerns with planting and emergence delays in the top spring wheat production state of North Dakota, portions of the state are off to a good start. USDA put 76% of the North Dakota spring wheat crop in the "good" to "excellent" categories as of Sunday.
Technical analysis: July Chicago wheat futures are technically bearish, but the contract is in a two-and-a-half-month basing pattern. Key support at the April low of $6.64 3/4 must hold or it would open sharp downside risk.
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 101 to 243 points lower through the December 2014 contract, which was on or near session lows.
Fundamental analysis: Followthrough selling was seen in the cotton market today with the July contract again leading the price decline. Traders continue to liquidate long positions in the lead-month contract following the expiration of July options last Friday.
Deferred contracts were pressured by the heavy selling in July cotton, with additional pressure coming from recently improved weather through dry areas of the South. While drought is lingering, traders' concerns about the crop have eased somewhat.
Technical analysis: July cotton futures have retraced more than 50% of the sharp rally from June 3-14. Given the low-range close and dramatic selloff yesterday and today, it points to additional near-term price pressure.
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.