Price action: Corn futures enjoyed gains throughout the day session and the market extended these gains into the close to end near-session highs with July up 18 1/2 cents, September up 13 cents and new-crop around 9 to 10 cents higher.
Fundamental analysis: Corn futures benefited from news of both old- and new-crop demand today. Ethanol production rose 2.1% last week to 875,000 barrels per day, drawing stocks down 247,000 barrels to 16.18 million barrels. This was an 11-month high in terms of production, renewing concerns about tight old-crop corn supplies.
New-crop contracts also benefited from news China bought 360,000 MT of corn for 2013-14 and that an unknown destination purchased 180,000 MT of new-crop corn. Meanwhile, a rainy forecast for already saturated Corn Belt soils raises concerns about getting the remainder of the crop seeded. This encouraged funds to buy 12,000 contracts (60 million bu.) of corn today.
Technical analysis: July corn settled near the top of the market's recent consolidation range. To break out of this range, the contract needs closes above resistance that is tightly layered from last week's high of $6.61 to the April high of $6.69. After that, bulls would target the top of the wide April 1 downside gap at $6.76.
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: Soybean futures extended gains into the close to finish 12 to 18 cents higher. Meal and soyoil enjoyed spillover support.
Fundamental analysis: Soybeans found support throughout the day on spillover from corn. Technical-based trade was also supportive as traders covered short positions in new-crop contracts and old-crop contracts pushed through long-standing resistance and triggered stops.
Meanwhile, indications that farmer selling has picked up, which is reflected by a weakening of country basis levels, was ignored by the market as the old-crop supply situation is tight. But without fresh news for the market to digest, it could be difficult for soybeans to generate sustained, strong followthrough buying despite the improved technical situation.
Technical analysis: July soybean futures moved to their highest level since early October by closing above the February high of $14.83 1/2. The contract is closing in on resistance at the 62% retracement level of the decline from the September high to the November low, which stands near $15.00. Support is at the halfway point of the range at $14.67. Meanwhile, November beans need closes above the April 30 high of $12.40 1/4 to confirm a near-term low has been posted.
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 backed off their highs into the close but still finished 7 to 8 cents higher in Chicago and mostly 4 to 6 cents higher in Kansas City. Minneapolis wheat ended narrowly mixed for the day.
Fundamental analysis: Wheat futures were boosted by strength in the corn market today, which triggered corrective short-covering. But strong gains in the U.S. dollar index, along with a lack of bullish news trimmed gains into the close. If wheat is going to post a sustained corrective rebound, corn must lead the way.
Recent rains through areas of the Central and Southern Plains have traders expecting the HRW wheat crop to make a partial recovery from persistent drought and multiple spring freezes. Plus, dry areas of Russia and Ukraine have received recent rains. As a result, traders are not showing concerns on the supply side of the market.
Technical analysis: Once again, July Chicago wheat futures are showing signs of firming after a dip below $7.00, suggesting there's some value buying below that level. The problem, however, is the upside is capped to around the $7.30 to $7.40 area without fresh bullish news.
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 settled slightly higher in all but the July contract, which ended 44 points lower. Despite the mostly firmer close, futures ended low-range.
Fundamental analysis: Cotton futures were supported by mild short-covering amid ideas Tuesday's losses were overdone. Strength in grains helped cotton. Buying interest was limited by strong gains in the U.S. dollar index. But today's modest gains in most contracts in spite of the dollar surge were rather impressive. With that said, additional dollar strength would be hard for the cotton market to ignore.
Traders will look, in part, to weekly export sales for price clues tomorrow.
Technical analysis: December cotton futures posted a modest inside day up on the daily chart. While Tuesday's boundaries are initial support and resistance, the more critical levels for the contract are at the May 1 low of 82.92 cents and the May 9 high at 87.25 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.