Price action: Corn futures settled around 2 cents lower today following a choppy, two-sided day of trade.
Fundamental analysis: Corn futures were caught between spillover pressure from wheat and spillover strength from soybeans today. In the end, wheat had a little more influence, though traders showed little willingness to move the market much. That's unlikely to change as much of the price action ahead of USDA's key reports next Monday will be position squaring. Given recent price strength, there's risk of additional profit-taking, especially if the wheat market extends today's losses.
Funds were neither net buyers nor net sellers on the day. But after building a long position the past two months, it wouldn't be surprising to see them peel off some of those long positions ahead of Monday's report -- in case there's a bearish surprise.
Technical analysis: May corn futures are holding in a short-term choppy range from $4.73 1/4 to $5.02 1/2. A downside breakout would also violate the uptrend from the winter low and give the impression of topping action. An upside breakout would point the contract toward the August 2013 high of $5.27 1/2.
Hedgers: 70% sold on old-crop. 30% of expected 2014-crop is sold via forward contract for harvest delivery.
Cash-only marketers: 60% sold on old-crop. 30% of expected 2014-crop is sold via forward contract for harvest delivery.
Price action: Soybean futures opened under pressure, but the market quickly firmed and futures ended high-range with gains of 6 1/2 to 12 cents in old-crop futures, while new-crop closed roughly 4 to 5 cents higher.
Fundamental analysis: Early pressure on the soybean market triggered some bargain buying as traders remain unwilling to push prices lower considering still-strong Chinese demand for U.S. beans that may be reflected in the Grain Stocks Report Monday. Traders expect the report to show March 1 stocks around 989 million bu., down 10 million bu. from last year's tight levels.
Light support also stemmed from risk reduction ahead of the weekly export sales update tomorrow. Expectations are lackluster, but recent reports have provided a bullish surprise.
But gains in new-crop futures have been limited by increasing talk about higher bean plantings this spring. Traders expect USDA to project soybean planted acreage at 81.075 million in its report Monday.
Technical analysis: May soybean futures continue to chop within a wide consolidated trading range. Initial support is at the psychological $14.00 mark, which roughly coincides with uptrending support drawn off the March lows. Resistance stretches from last week's high of $14.56 1/2 to the contract high of $14.60.
Hedgers: 25% of expected 2014-crop is sold via forward contract for harvest delivery. 100% sold in the cash market on 2013-crop production.
Cash-only marketers: 25% of expected 2014-crop is sold via forward contract for harvest delivery. 90% priced on old-crop.
Price action: Wheat futures posted double-digit losses, with HRW futures leading declines paced by the lead May contract, which closed down 20 1/2 cents. Most contracts finished near their lows of the days.
Fundamental analysis: Profit-taking was the dominant feature of today's trade along with a stronger U.S. dollar. The key news was the precipitation moving into the parched Southern Plains with forecasts containing chances for more. While amounts are light, the idea that rain could occur was enough to prompt profit taking. Funds sold 6,000 contracts (30 million bu.) today.
Meanwhile, traders are preparing for the two key USDA reports due for release on Monday. Current expectations call for spring wheat acreage of around 12.27 million, a 674,000-acre increase from 2013. All wheat acreage of around 56.277 million is expected, which compares to 56.156 million in 2013. In addition, traders expect the Grain Stocks Report to reveal March 1 wheat stocks of around 1.042 billion bu., down from 1.235 billion bu. a year ago.
Technical analysis: May SRW wheat futures fell back to test support resting just above the $6.90 area. But prices remained confined within the broad trading range posted on Monday. That contract closed right on the steep March uptrend line today. The shallower February-March uptrend line offers support at $6.20 -- more than 70 cents away. But a strong band of support runs form $6.70 to $6.94.
Hedgers: 50% of expected 2014-crop is sold via forward contract for harvest delivery. 100% sold on 2013-crop.
Cash-only marketers: 90% sold on old-crop. 50% of expected 2014-crop is sold via forward contract for harvest delivery.
Price action: Cotton futures posted an extremely wide trading range with the May and July contracts closing 245 and 218 points lower, respectively. The October through May 2015 contracts finished 16 to 100 points lower.
Fundamental analysis: Cotton futures posted new highs for the move in the early overnight trade and then faded amid heavy profit-taking. Market-sensitive news was lacking today, but the spike to 97.35 cents in the front-month May contract, a multi-year high, prompted profit-taking after yesterday's sharp runup. Later in the trading day USDA released a report from its ag attaché in Brazil projecting an 18% increase in the area planted to cotton in 2014.
Technical analysis: May cotton futures collapsed today in highly volatile trade. A 652-point trading range ended with futures closing low-range. The broadening pattern and increased volatility this week is a potential red flag that the contract may be topping. The November-March uptrend line offers support just under 89.00 cents through Friday.
Hedgers: 75% of 2013-crop is sold in the cash market. 25% of expected 2014-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 75% of 2013-crop is sold. 25% of expected 2014-crop production is forward sold for harvest delivery.