Price action: Corn futures settled 9 1/2 to 11 3/4 cents higher for the day, which was high-range, with the December contract leading to the upside.
Fundamental analysis: Corn futures got an early boost from reports congestion in Brazilian ports has delayed shipments of at least 1.5 MMT of corn, mainly to Asian exporters, which market bulls are hopeful will translate to increased demand for U.S. corn. A surge in Gulf basis levels at midday may signal this is occurring, though this also signals low water levels on the Mississippi River are disrupting shipments.
An easing of fiscal cliff concerns also boosted investor risk appetite today. The U.S. dollar index was under pressure, while commodities and the stock market firmed. A stronger-than-expected weekly corn export inspections tally (though expectations were admittedly low), also supported corn futures.
Technical analysis: December corn futures posted an upside day of trade and settled high-range. Followthrough buying overnight would have bulls eyeing the Nov. 9 high of $7.55. Support is layered from last week's low of $7.10 1/2 to the September low of $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 futures were supported throughout the day by short-covering and closed 11 1/2 to 16 cents higher.
Fundamental analysis: Positive outside markets encouraging traders to cover short positions in the soybean market. The dollar softened on rising optimism lawmakers will devise a plan to avoid the fiscal cliff and investors were also encouraged by stronger-than-expected existing home sales for October.
Additional support came from improved in Gulf soybean basis, which jumped 4 to 8 cents for nearby delivery -- signaling a pickup in export demand. News that China has suspended auctions of soybeans from state reserves has given rise to expectations the country will fill its near-term needs with U.S. purchases.
Technical analysis: Soybean futures still have some work to do in order to improve the technical situation after extending losses last week. January beans posted an inside day of trade on the daily chart and must at least move above downtrending resistance drawn off September and November highs to signal a near-term low has been posted. Tomorrow, that trendline intersects around $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.
Price action: Wheat futures closed 3 3/4 to 6 1/4 cents higher in Chicago, steady to 5 1/2 cents higher in Kansas City and fractionally to 6 1/4 cents higher in Minneapolis.
Fundamental analysis: Despite highly supportive outside markets and spillover support from corn and soybeans, wheat futures struggled to find active buying interest today. Part of that was likely due to thin pre-holiday trade, but still, bulls have to be somewhat disappointed in today's price performance given the circumstances.
The other factor that limited buying interest in the wheat market is a lack of supportive demand news. While Black Sea region wheat supplies are tightening, U.S. wheat still isn't competitively priced on the global market, limiting the likely near-term impact from reduced competition.
Technical analysis: December Chicago wheat futures closed back above the October low at $8.40 1/4 after posting a single close below that level last Friday, suggesting the contract could be ready for a short-covering bounce. But the contract remains in the downtrending channel from the summer high, which limits the upside to corrective buying.
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 closed 54 to 89 points lower, which was near session lows.
Fundamental analysis: Cotton futures were unable to take advantage of supportive outside markets today. While cotton futures found light support from pressure on the U.S. dollar and an improved risk appetite, buying interest wasn't sustained given a lack of fundamental support.
The commercial buying interest that supported cotton futures wasn't present today, suggesting physical demand for cotton remains selective. There's still demand on price breaks, but any upward movement in cotton futures quickly curbs buying interest.
Technical analysis: Short-term trading boundaries for December cotton futures lie at the Nov. 8 low at 69.03 cents and last week's high at 74.63 cents. Broader parameters for the contract are at the contract low of 64.61 cents and 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.