Price action: Corn futures rallied into the close to finish on session highs and mostly 8 to 12 3/4 cents higher. December through July futures led the way with gains around 12 cents.
Fundamental analysis: Corn futures were supported by spillover support from soybeans and wheat throughout the session, but struggled to find active buying interest until late. Fundamental support came from South American crop concerns and a firmer cash market.
Whether the basis strength is tied to slowed movement due to river transportation problems or a pickup in demand -- or both -- remains uncertain. But strength in the cash market gave traders a fundamental reason to be buyers into the close. Key will be whether the late strength in the cash market and futures leads to followthrough buying.
Technical analysis: December corn futures picked up technical momentum after closing above the 40- and 50-day Moving Averages yesterday. Tough resistance stands at the October high at $7.76, which represents the top of the 2-plus month, sideways trading range.
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 enjoyed price strength throughout the day and rallied into the close to finish near session highs with gains of 20 to 25 1/4 cents through the August contract; farther deferred months posted gain in the teens.
Fundamental analysis: Soybean futures benefited from additional corrective short-covering amid ideas the downside was overdone on the sharp price plunge, especially considering increasing dryness in southern areas of Brazil. South American production is expected to be record-large, but the bulk of the growing season lies ahead.
Steady to firmer Gulf basis levels at midday have traders hopeful export demand lies ahead. In fact, there were rumors today China is shopping (or has already bought) soybeans.
Technical analysis: January soybean futures continued in their uptrend since mid-month today. The contract needs closes above former support at the October low of $14.84 to confirm a near-term low is in place. Near-term support stands at the psychological $14.00 mark, followed by the Nov. 16 low of $13.72 1/4.
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 rallied into the close to finish high-range. Kansas City led gains to finish mostly around 31 cents higher. Chicago and Minneapolis wheat posted gains in the low to mid-20s.
Fundamental analysis: Early support was tied to yesterday's final winter wheat crop condition ratings of the season, which reflect a record-low 33% of the crop in "good" to "excellent" shape. Given the dry extended weather outlook, traders are concerned the crop will come out of dormancy in tough shape.
Also supportive today was news China's ag ministry expects its wheat imports to rise 10% in 2013, as production is expected to decline while consumption is expected to rise. Meanwhile, traders remain disappointed the U.S. hasn't garnered a larger share of global wheat business, which signals prices here are not competitive. Today's gains are especially impressive in light of strength in the U.S. dollar index.
Technical analysis: December Chicago wheat futures posted a big upside day of trade on the daily chart and came just shy of the 38% retracement level (which stands at $8.77) from the July high to the November low. Closes above this level would signal a near-term low has been posted and make $8.91 -- the halfway point of the range -- bulls' next target. Support begins at the 25% retracement level at $8.60 and extends to the November low of $8.29 1/2.
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 opened firmer but softened into the close to finish 6 to 39 points lower.
Fundamental analysis: Early strength was tied to spillover from the soybean market, as the two will be competing for acres this spring. But the lack of fresh news and strength in the U.S. dollar index caused cotton futures to soften into the close. Traders say recent improvement in export sales is being offset by plentiful global supplies, although they acknowledge if demand for U.S. cotton remains strong, it will at least help to limit overall downside price risk.
Technical analysis: December cotton futures posted a narrowly traded session within the upper half of yesterday's price range. Near-term boundaries are support at the November low of 69.03 cents and resistance at the November high of 74.63 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.