Price action: Corn futures settled 8 1/2 and 8 3/4 cents higher in the May and July contracts, respectively. September futures finished 2 cents higher, while new-crop contracts managed fractional gains.
Fundamental analysis: Bull spreading was seen in the corn market throughout today's session as tight supplies continue to support old-crop contracts. While the supply picture is bullish for old-crop corn, demand is needed to fuel sustained price strength -- and that's lacking.
New-crop futures were choppy to lower for much of the day, but were pulled higher by old-crop contracts into the close. With traders penciling in a record crop this year, however, the upside is limited unless there's a strong pull from old-crop contracts.
Funds were net buyers of corn, purchasing an estimated 8,000 contracts (40 million bu.) today. Over the past four sessions, funds have bought 25,000 contracts (125 million bu.) of corn.
Technical analysis: May corn futures continue to climb toward tough resistance at the February high of $7.47 1/2. Support is layered from $7.12 3/4 to $7.06 3/4. Violating that support would point the contract toward a test of the psychological $7.00 mark.
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 were choppy today, but drifted lower into the close to finish 2 3/4 to 8 cents lower. Meal ended mixed amid bull spread unwinding, with soyoil weaker on spillover from sharp losses in crude oil.
Fundamental analysis: Old-crop futures were initially supported by bull spreading on concerns about tight stocks, but as the day progressed, a risk-off stance triggered by dollar strength led to selling in soybean futures. Traders recognize there are lengthy shipping delays in Brazil, but believe end-users' focus has turned to abundant South American supplies that could lead to a long shipping season and a significant slowdown for U.S. soybean exports.
Traders are also uncertain in a Chinese buyer, that has been reported to have canceled around 2 MMT of Brazilian beans, will rebook its needs with U.S. soybeans. Shipping delays in South America could result in one more push higher for soybean futures if a pickup in demand is seen.
Technical analysis: May soybean futures posted a low-range close, coming within 3 cents of the psychological $14.00 level. Violation of this level could trigger sell stops, making bears' next target the January low of $13.44.
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: After a choppy overnight session, wheat futures firmed with the start of open-outcry trade and posted a high-range close. Chicago wheat closed 2 3/4 to 9 1/4 cents higher, with Kansas City up 1 3/4 to 7 cents. Minneapolis wheat closed 2 1/4 to 9 1/4 cents higher. Nearby futures at all three exchanges led gains.
Fundamental analysis: May Chicago wheat continues to trade at a discount to May corn futures. This provided support for wheat futures today despite strength in the U.S. dollar index. Recent improvements in demand for U.S. wheat are being noted by traders, but a steady stream of demand news is needed or wheat runs the risk of a sharp selloff -- especially given recent strength in the dollar index.
Wheat was also supported today by concerns about the HRW wheat crop. While condition ratings have upticked recently due to timely moisture, warmer temps across the Southern Plains are raising moisture requirements and the near-term forecast is mostly dry.
Technical analysis: May Chicago wheat futures posted a high-range close and an upside day of trade on the daily chart. But the contract needs closes above last week's high of $7.25 1/2 to signal a near-term low has been posted and make bulls' next target the January low of $7.45 1/4. Support lies at the March low of $6.81.
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: Cotton futures closed narrowly mixed following a choppy day of trade.
Fundamental analysis: Cotton futures were higher this morning as the market rebounded from yesterday's corrective losses. But as the dollar firmed mid-morning, buying interest faded and some contracts weakened. Still, selling interest was limited, signaling attitude remain bullish.
The rising dollar has had limited impact on cotton futures to this point. In fact, cotton futures have rallied with the dollar the past two months amid expectations China will be an active buyer of U.S. cotton in April when new import quotas are expected to be granted. But it's important to watch for any signs of a letup in export demand.
Technical analysis: May cotton futures are still looking for consecutive higher closes above 91.60 cents that are needed to turn that level into solid support. The contract has spent the past two days pivoting around this level after closing above it last Friday.
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.