Price action: Corn futures were softer during the open-outcry session but came off the lows into the close to trim losses. March corn closed 1/4 cents higher, with the rest of the market 1 1/4 to 4 cents lower.
Fundamental analysis: A combination of dollar strength and spillover from double-digit losses in nearby soybean futures pressured corn futures. Traders also reacted to news an unknown destination purchased 114,300 MT of grain sorghum for 2012-13, which signals end-users are increasingly seeking less expensive feed alternatives to U.S. corn. Gulf basis was 3 cents higher this morning and held steady into midday, which signals some fresh corn demand new could be announced soon, but this could also be a factor of the tight supply situation.
Meanwhile, pressure on new-crop futures was limited by recent soil moisture improvements across the Corn Belt, which leads traders to expect a large recovery in production for the upcoming year.
Technical analysis: December corn futures saw trade below yesterday's low of $5.51 1/2 before returning mid-range into the close. Initial resistance stands at yesterday's high of $5.59 1/2 and extends to the mid-February high of $5.68. Closes above the latter level are needed to confirm a near-term low has been posted. A return below support at last week's low of $5.38 1/2 would make bears' next target the June low of $5.11.
Hedgers: 100% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop, including 15% for May 2013 delivery. No 2013-crop sales recommended yet.
Price action: Soybean futures faced pressure most of today's session and settled 14 3/4 to 21 3/4 cents lower in old-crop contracts. September soybeans ended 11 3/4 cents lower and new-crop futures settled 6 to 7 cents lower. Soymeal and soyoil posted moderate losses.
Fundamental analysis: Strength in the U.S. dollar index today encouraged selling in the bean pit. Traders are concerned that export demand will soon fade as South American supplies will soon freely flow onto the world market. USDA last week left its export forecast unchanged in anticipation this will markedly slow U.S. bean exports. This week's relatively light weekly export inspections tally for beans and declines in Gulf basis levels today fuel such ideas. Traders will watch tomorrow's export sales report for more clues as to the state of export demand.
Meanwhile, expectations for a record 2013 bean crop continue to weigh on new-crop futures.
Technical analysis: May soybean futures traded through near-term resistance at Friday's reaction low. Bears' next target is the Feb. 26 low of $14.20 1/2, followed by the psychological $14.00 level. Strong resistance remains at the February high of $14.97.
Hedgers: 100% sold on 2012-crop in the cash market. No futures/options positions at this time. No 2013-crop sales advised yet.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery. No 2013-crop sales advised yet.
Price action: Wheat futures closed mostly 3 to 6 cents higher in Chicago and Minneapolis, while Kansas City wheat ended roughly 2 to 4 cents higher.
Fundamental analysis: Wheat futures were supported by corrective buying and signs of increased demand. That allowed wheat futures to firm in the face of strong pressure from corn and the U.S. dollar today.
With corn supplies very tight and May Chicago wheat trading at a discount to May corn recently, demand for feed wheat and at ethanol plants is increasing. Plus, export demand has improved recently. As a result, the market is signaling prices have fallen "far enough."
Additional support came from long corn/short wheat spreading unwinding. Traders moved May Chicago wheat within 1/4 cent of May corn futures. It wouldn't be shocking to see nearby wheat move back to a premium to corn on corrective trade.
Technical analysis: To signal an extended correction is underway, May Chicago wheat futures must clear the downtrend from the November swing highs. That trendline intersects at $7.23 Thursday.
Hedgers: 75% sold on 2012-crop in the cash market. No 2013-crop sales advised yet.
Cash-only marketers: 75% of 2012-crop is sold. No 2013-crop sales advised yet.
Price action: May and July cotton futures ended 126 and 135 points higher, respectively. Deferred contracts were 31 to 98 points higher. Futures closed in the upper end of today's range, but off session highs.
Fundamental analysis: Cotton futures rallied in the face of strong gains in the U.S. dollar today. But that's been the case for the past six weeks as cotton futures have continued to rally along with the dollar.
With cotton futures rallying and the dollar firming, the price of U.S. cotton on the world market is sharply higher than it was in early February. Despite the sharp price rise, demand for U.S. cotton has not slowed dramatically. Traders are waiting on signs prices have risen "far enough" before they pull back the reins.
Technical analysis: May soybean futures moved to the highest level today since May 2 of last year. Resistance stands at 90.70 cents and then 91.60 cents.
Hedgers: 50% priced on expected 2012-crop production in the cash market.
Cash-only marketers: 50% priced on expected 2012-crop production in the cash market.