Price action: Corn futures didn't stray far from unchanged today and ended steady to 2 1/4 cents higher for the day.
Fundamental analysis: Corn futures were choppy today as traders weighed tight supplies against signs of demand destruction. While low water levels on the Mississippi River are an increasing concern as disruptions to barge traffic would make tight supplies even less readily available, news Japan plans to slash its U.S. corn use in favor of Brazilian supplies reminded traders of demand destruction.
South American weather is also a mixed bag. Southern Brazil is dry, but there are rain chances for the area later this week. Meanwhile, a return of rainy weather after a brief letup in Argentina increases the chances unplanted acres will be switched to corn.
Technical analysis: December corn futures' recent closes above the 50-day moving average opens upside potential to the 100-day moving average, which the contract stopped just 4 cents short of earlier today. The October high of $7.76 is another key area of resistance. Strong support lies at the November low of $7.10 1/2.
Hedgers: 100% sold on 2012-crop in the cash market -- 10% for March 2013 delivery.
Cash-only marketers: 75% sold on 2012-crop --10% for March 2013 delivery; 15% for May 2013 delivery.
Price action: Soybean futures finished mid-range with losses of 2 1/2 to 6 cents through the January 2014 contract.
Fundamental analysis: Traders took a break from the recent corrective buying in the soybean market. While USDA announced a daily soybean sale of 290,000 MT to China and outside markets reversed course from early in the day and turned price-positive, soybean futures struggled to find enough buying interest to work higher. That's an indication recent price strength has had more to do with corrective trade than fresh buying.
The South American weather situation remains a mixed bag. While conditions have improved in Mato Grosso, Brazil, dryness is a concern in southern Brazil. And in Argentina, excessive moisture continues to delay planting efforts, although that likely means some intended corn acres will be switched to soybeans. There are also questions about how much impact delayed soybean plantings will have on yields.
Technical analysis: January soybean futures remain in the modest uptrend from the November low. To signal the move higher is more than a correction to the sharp price plunge, the contract must first clear the 25% retracement of the September to November move down at $14.74 1/2 and then push above old support at $14.84.
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 mostly 2 to 5 cents higher in Chicago, mostly 2 to 4 cents higher in Kansas City and mostly 2 cents higher in Minneapolis. Futures backed off today's highs but finished in the upper third of the price range.
Fundamental analysis: Wheat futures faced early pressure from light profit-taking and negative outside markets. But as outside markets reversed course, selling interest dried up and focus returned to crop concerns in the Plains. With the HRW crop in need of rain and the extended forecast offering little hope of relief, it's likely crop conditions will decline this winter.
What the market needs for a sustained rally is a boost in export demand. While Black Sea wheat exports are expected to decline, the situation is uncertain. Ukraine now says it will allow exporters to continue to ship wheat despite the 5.5-MMT cap being hit and the Dec. 1 date for a supposed export ban just days away.
Technical analysis: December Chicago wheat futures have moved into the upper half of the downtrending channel from the summer highs. Key resistance at the top of the channel intersects just above the $9.00 mark. Key support is at the Nov. 16 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 saw a choppy day of trade and ended likewise, with most contracts favoring the upside.
Fundamental analysis: Choppy action in the cotton market mirrored mixed trade in the U.S. dollar index today. The dollar's move into negative territory around midday helped bulls pull most contracts to a slightly firmer close. Light support also stemmed from hopes tomorrow's Weekly Export Sales Report will reflect ongoing improvement in cotton demand, especially from China.
Technical analysis: March cotton futures continue to chop within a narrow trading range bound by the November low and high of of 69.79 cents and 73.15 cents, respectively.
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.