Price action: Old- and new-crop corn futures diverged amid bull spreading today to end fractionally higher in the front-month contract, 12 3/4 cents lower in the September contract and around 10 cents lower in new-crop futures.
Fundamental analysis: Signs that demand for corn supplies are picking up -- namely a one-year high in ethanol production last week and basis strength around the country -- continues to support old-crop corn futures. Meanwhile, market action in new-crop corn signals the market is not overly concerned about continued delays in getting the remaining 9% of the corn crop seeded or the likely need for substantial corn replanting. Rather, they are focused on replenished soil moisture and some forecasts for improved weather next week.
Deferred contracts are also facing technical selling pressure after December corn fell through and closed below the the 100-day Moving Average yesterday after trading above that level the latter half of last week and Monday. Funds sold 8,000 corn contracts (40 million bu.) today.
Technical analysis: December corn futures tested but respected near-term gap support from $5.27 to $5.41 1/2. Filling the gap would signal a test of the 2013 low at $5.12 is likely. The 100-day Moving Average which intersects in the $5.55 area tomorrow is initial resistance, followed by yesterday's high of $5.73 1/2.
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 3 1/4 and 2 3/4 cents higher, respectively. September beans were 6 1/4 cents lower. New-crop contracts finished 15 to 16 cents lower for the day.
Fundamental analysis: Tight supplies supported old-crop soybeans today, though futures were pulled well off session lows by the drop in new-crop contracts. While traders have known about tight old-crop stocks for many months, new-crop uncertainties amid planting delays are supporting summer-month contracts.
While new-crop uncertainties persist, talk of some unplanted corn acres switching to soybeans is pickup up steam. That's enough for now to trigger some profit-taking following the recent runup. If the acreage-switch talk builds, it could cause a greater price pullback.
Technical analysis: November soybeans dipped below $13.00, but closed right at that psychological level. A close below this mark and a drop back into the long-term downtrend, which intersects at $12.99 1/2 tomorrow, would suggest a pullback to the pivotal $12.80 level is likely.
Hedgers: 100% sold on 2012-crop in the cash market. 50% of expected 2013-crop production is hedged in November soybean futures at $12.19. 10% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 90% sold on 2012-crop. 10% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Wheat futures were in a follower's role and softened as neighboring corn and soybean futures were hit with fresh selling interest. Chicago and Kansas City wheat ended mostly around 7 to 13 cents lower, with Minneapolis closing mostly 5 to 8 1/2 cents lower.
Fundamental analysis: On top of spillover from neighboring pits, wheat was also pressured by forecasts for more rains this week across the Central and Southern Plains, including the drier western areas. Traders are already anticipating harvest-related pressure will build over the near-term, although this year's crop is more delayed in maturity than usual.
Traders are also keeping a close eye on the export situation given some countries have at least temporarily snubbed the U.S. due to the ongoing GMO-wheat incident in Oregon. South Korea today said it doesn't want U.S.-origin wheat as part of its 60,000-MT optional-origin purchase.
Technical analysis: September Chicago wheat futures posted a downside day of trade on the daily chart and closed low-range, but the contract still remains well within the boundaries of the consolidation range that has held prices since early March. Resistance at the top of the range stands at $7.46 3/4 and support at the bottom of the range lies at $6.73 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: Nearby cotton futures posted a low-range close, but the rest of the market posted a mid- to high-range close. All but the far-deferred contracts ended slightly to moderately lower.
Fundamental analysis: Following yesterday's gains, cotton futures were vulnerable to profit-taking pressure. The lack of fresh news contributed to losses, especially with the Dow Jones Industrial Average softening through the day.
Traders say they "took a break" from adding long positions today as they wait for tomorrow morning's weekly export sales data. Traders are interested to see if last week's softer prices encouraged a boost in export demand, which has slowed in recent weeks.
Technical analysis: December cotton futures posted an inside day of trade on the daily chart and closed mid-range. Near-term boundaries are resistance at yesterday's high of 86.41 cents and support at Monday's low of 81.72 cents.
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.