Price action: Corn futures saw a highly choppy day of trade and finished mixed. December through July futures ended 1 1/4 to 5 1/2 cents higher, while the remaining contracts were mostly fractionally to 1 cent lower.
Fundamental analysis: Corn favored a firmer tone through the overnight hours but drifted lower this morning and extended losses into midday before returning to near session highs in the nearby contracts ahead of the close. Periods of price pressure came on concerns about demand and strength in the U.S. dollar index, but the overall tightness of supplies helped to limit spillover pressure from yesterday's losses.
Traders basically ignored this morning's news that an unknown buyer purchased 158,496 MT of U.S. corn, as they suspect the business is to Japan and has already been factored into prices. Adding to pressure around midday was a disappointing weekly export inspections tally,, reminding traders of demand destruction.
Technical analysis: Corn futures have avoided any serious technical chart damage, but must respect support at the September lows to avoid possibly triggering sell stops. For the December contract, that support lies at $7.05.
Hedgers: 100% sold on 2012-crop in the cash market -- 90% for harvest delivery; 10% for March 2013 delivery. Also, Dec. $6.50 put options, which were purchased on 40% of 2012-crop for 31 1/2 cents, are held as a crop insurance hedge.
Cash-only marketers: 75% sold on 2012-crop -- 50% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery.
Price action: Soybean prices closed mixed with the November and January contracts 16 and 3 cents higher, respectively, while deferred months were 2 1/4 to 5 1/2 cents lower. Most contracts finished mid-range.
Fundamental analysis: Soybean futures ran into active liquidation pressure through much of the morning given improved Brazilian weather conditions, continued reaction to USDA's reports last Friday and a weakening technical picture. But futures came well off session lows into the close amid ideas recent losses have been overdone, which triggered corrective short-covering. Before active buying returns to the market, however, traders will want to see fresh demand news which would signal end-users feel prices have fallen far enough.
Weekly export inspections were again very strong at 64.065 million bu., with China again the main destination.
Technical analysis: January soybean futures got within about a dime of a 75% retracement of the June-to-September price surge at today's low. That support lies at $13.82 1/4. A close below that level would leave the contract void of strong chart support until the June low at $12.49 1/2.
According to the 9-day Relative Strength Index, January soybean futures are still oversold at 21.65% despite today's modest price strength, suggesting a time or price correction is due.
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.
Price action: Chicago wheat futures closed mostly 4 1/4 to 6 3/4 cents lower. Kansas City wheat was fractionally to 2 3/4 cents lower in most contracts. Minneapolis wheat closed mostly 2 1/4 cents lower to 6 1/4 cents higher.
Fundamental analysis: Wheat futures were pressured by comments from Ukraine's prime minister today saying the country would not restrict wheat exports. While Ukraine's decision may turn out to be a moot point as exportable supplies are thought to be quickly dwindling, his comments weighed on the market nonetheless.
Additional pressure came from continued strength in the U.S. dollar and spillover from the corn and soybean markets for much of the session. With the U.S. dollar rallying amid flight-to-quality buying, it becomes harder for U.S. wheat supplies to compete on the global market. And there are already concerns about the competitiveness of U.S. wheat.
Technical analysis: After spiking the top of the downtrending channel last Friday, December corn futures got within three cents of key support at the October low at $8.40 1/4. Violation of that level would open risk to the $8.16 1/4 to $8.15 level. If selling interest dries up around the October low, however, it would point futures back to the top of the downtrending channel.
Hedgers: 75% cash sold on 2012-crop in the cash market.
Cash-only marketers: 75% of 2012-crop production is sold.
Price action: Cotton futures were slightly lower through the day and closed 23 to 82 points lower, which was low-range but off session lows.
Fundamental analysis: Strength in the U.S. dollar index led to pressure on cotton futures, although selling was limited as traders say demand is showing signs of picking up. According to official Chinese customs data, the country imported 272,100 MT of cotton in October, up 7.8% from last year and 3.5% more than September. Year-to-date imports of 4.3 MMT are up 96% from year-ago.
Technical analysis: December cotton futures posted an inside day of trade on the daily chart and finished low-range. Futures generally traded in the upper half of yesterday's trading range. Support lies at last week's low of 69.03 cents. Resistance begins at yesterday's high of 71.59 cents and extends to the October high of 79.19 cents.
Hedgers: 50% priced on expected 2012-crop production via cash forward contract for harvest delivery. A breakout from that range is needed to spark a trending move.
Cash-only marketers: 50% priced on expected 2012-crop production via forward contract for harvest delivery.