Price action: Corn futures settled 4 to 6 1/2 cents lower in most contracts today, which was low-range but off session lows.
Fundamental analysis: There wasn't any fresh fundamental news that drove corn futures lower today, but this year's record crop continues to act as a wet blanket on the market. Funds, who had covered some of their large net short position the past three sessions, were net sellers today. Funds sold an estimated 9,000 contracts (45 million bu.) on the day.
The volume of fund selling today was a little surprising as market participants weren't expected to actively add new positions ahead of Thanksgiving. That's clear confirmation attitudes are fully bearish and funds don't appear concerned about carrying a hefty short position into the start of the holiday season.
Technical analysis: The extended downtrend for December corn futures remains firmly intact. To give an initial indication the contract is working on a short-term low, a close above the last correction high at $4.38 is needed. A drop through last week's low at $4.10 3/4 would point the contract toward a test of the psychological $4.00 level.
Hedgers: 25% of 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures pared losses heading into the close. The market ended steady to 5 cents lower, with the January contract finishing unchanged on the day. Soymeal ended mixed with winter-month contracts firmer. Soyoil posted losses for the day.
Fundamental analysis: A firming in nearby meal futures and gains in Gulf soybean basis at midday helped the soybean market move well off its lows as this may indicate fresh export demand news is ahead. But for much of the day, soybeans struggled to shake the pressure of pre-holiday profit-taking following recent gains and news of a 300,000-MT soybean cancellation by China. Somewhat limiting the impact of this news was a 360,000-MT soybean sale to unknown destinations for 2013-14.
Losses in the corn and wheat markets also made traders reluctant to add long positions ahead of the Thanksgiving holiday.
Technical analysis: January soybean futures saw an inside day of trade, but the market finished high-range, which could give bulls an advantage heading into the overnight session. Their initial target is yesterday's high of $13.34 1/2. The psychologically significant $13.00 level marks support.
Hedgers: Get to 100% sold in the cash market on 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on 2013-crop production.
Price action: Most wheat contracts backed off their lows late in today's session to close mostly around 3 cents lower in the SRW and HRW markets and 1/2 to 5 1/2 cents lower in HRS wheat.
Fundamental analysis: Recognition that the U.S. winter wheat crop is entering dormancy in generally favorable condition, despite a slight decline in condition ratings over the week prior, pressured the wheat market today. Losses in the corn market and a lack of buying interest ahead of what will be an extended break from the markets for some traders added to the negative tone.
Traders remain hesitant to push wheat prices higher since previous gains have slowed export demand.
Technical analysis: December SRW wheat futures finished low-range but well within the market's narrow consolidation range between $6.55 and $6.40, which mark near-term resistance and support, respectively. A move through the downside would open risk to the contract low, while an upside breakout would have bulls targeting the August high of $6.76 1/2.
Hedgers: 75% sold on 2013-crop in the cash market. No 2014-crop sales are advised.
Cash-only marketers: 50% sold on 2013-crop. No 2014-crop sales are advised at this time.
Price action: Cotton futures closed 38 to 89 points higher today, which was well off session highs, but still mid-range to upper-range in most contracts.
Fundamental analysis: The Chinese government will reportedly begin auctioning its massive stockpile of cotton on Thursday. Instead of the expected negative price reaction, however, futures found support from the news as the minimum auction price is much higher than anticipated. That has traders expecting limited demand for the Chinese cotton, especially since quality may be an issue with some of the supplies. Therefore, there's some hope demand for U.S. cotton won't suffer as much as previously expected due to the Chinese stockpile sales.
Additional support came from weakness in the U.S. dollar index today. After firming from late October to early this month, the dollar is showing signs of rolling over, spurring some expectations it could be poised for a fresh wave of selling. The cheaper the U.S. dollar, the more attractive U.S. cotton looks on the global market.
Technical analysis: March cotton futures have posted consecutive days of gains following last Friday's downside breakout from the short-term consolidation range, suggesting Friday's price action may have been a bear trap. Near-term resistance is at the Nov. 6 high of 80.52 cents and then 81.64 cents, while support is at Friday's low of 76.65 cents.
Hedgers: 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.