Price action: July corn futures closed 9 cents higher, while the September contract and new-crop futures were mostly 19 to 21 cents higher. Futures ended near session highs.
Fundamental analysis: Fund-led technical-based buying provided much of the early support in the corn market today. Buy stops were triggered as futures pushed above resistance, sharply increasing gains. Funds bought an estimated 18,000 contracts (90 million bu.) of corn.
Fundamental support came from new-crop weather concerns as some extended forecasts call for hot and dry conditions across areas of the Corn Belt. While some warm, sunny days would promote crop growth, an extended period of hot and dry conditions would not be favorable given the delayed start to the growing season.
While price action was strong today, there is a potential warning sign as traders are unwinding bull spreads in the face of basis strength. That is a potential sign old-crop futures may be losing favor with traders despite strong fundamentals.
Technical analysis: December corn futures are back to a level that has stalled rallies in March, April and early this month. Tough resistance is layered from $5.70 to $5.73 3/4. A push through that level would open upside potential to the $6.00 area. If this near-term resistance again holds, it would suggest futures are likely headed back toward $5.25.
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: July and August soybean futures closed 12 1/4 and 11 1/2 cents higher, respectively, while the September contract was 15 1/2 cents higher and new-crop contracts finished 15 1/2 to 21 cents higher. That was a high-range close, but off session highs.
Fundamental analysis: Soybean futures worked higher on technical-based buying through mid-morning, but gains sharply extended after Informa Economics released its updated planted acreage forecast. While the firm sees soybean plantings up 630,000 acres from March intentions at 77.756 million acres, that's 530,000 acres less than Informa expected last month.
Traders are also showing some concern about the potential for an extended period of hot, dry conditions this summer following the very wet spring.
Funds got into the buying action , purchasing an estimated 7,000 contracts (35 million bu.) of soybeans on the day.
Technical analysis: November soybean futures closed above $13.00 today after three consecutive closes below that level. The June 7 high of $13.33 is bulls' initial target, followed by the February high of $13.50 3/4. Support is at Monday's low of $12.77 1/2, which matched the May 30 low.
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: Chicago and Kansas City wheat futures ended with gains of 18 1/2 to 20 1/2 cents in most contracts for a high-range close. Minneapolis wheat also ended high-range with most contracts posting gains around 14 to 15 cents.
Fundamental analysis: Wheat futures led the rally in the wheat market today, but much of the buying interest stemmed from technical short-covering as contracts moved through key levels of resistance. Strength in the U.S. dollar index and the ongoing winter wheat harvest could encourage profit-taking in the Chicago and Kansas City markets.
Minneapolis wheat, on the other hand, was supported by ongoing planting delays and slow development of the spring wheat crop. Due to persistent cool, wet weather this spring, Informa Economics reportedly expects USDA to lower its spring wheat planted acreage estimate by 910,000 acres from March intentions to 11.791 million acres.
Technical analysis: July Chicago wheat futures today turned the psychological $7.00 mark into support. Followthrough buying would have bulls' targeting the June high of $7.14, followed by the April high of $7.36 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 faced pressure most of the day, though the market ended well off session lows. July cotton ended 42 points higher, while the rest of the market posted losses of 24 to 72 points.
Fundamental analysis: Cotton futures extended their recent slide amid profit-taking following heavy rain in western Texas, which bodes well for the cotton crop in this drought-stricken region. Light pressure also stemmed from reports Informa Economics expects USDA to raise its all cotton acreage estimate by 345,000 acres from March intentions to 10.371 million acres in the June 28 Acreage Report.
But recent export sales reports have shown solid demand for the cotton, which helped the market to trim losses heading into the close.
Technical analysis: December cotton futures tested technical support at the 25% retracement of the November to June rally around 85.76 cents, but the contract bounced off that level. A move through that support would set the contract up for a test of the 38% retracement level at 83.75 cents. The 2013 high of 89.56 cents is resistance.
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.