Price action: December corn futures settled 8 3/4 cents lower and on session lows. Deferred contracts were 3 to 5 1/4 cents lower and finished just off session lows.
Fundamental analysis: Corn futures were choppy through much of the morning, but buying interest was replaced with light profit-taking this afternoon. Encouragement for traders to take profits came from a disappointing weekly export sales figure (236,100 MT for 2012-13 and 27,400 MT for 2013-14) and a less optimistic tone on fiscal cliff talks.
Funds were on the sell side of the market today, dumping an estimated 7,000 contracts (35 million bu.) of corn. Speculative money flow will be key to near-term price action as futures have moved to the top of the extended, sideways trading range and will likely need active fund buying to push above the top.
Technical analysis: Key resistance at the top of the choppy range for March corn futures lies at $7.75 3/4. Above that level, bulls would target the psychological $8.00 mark and then the contract high at $8.45. Failure to clear the top of the range would point the contract back toward the lower end. Strong support lies at the September low at $7.08 3/4.
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 saw a choppy day of trade, with bulls holding a slight advantage most of the day and into the close. January futures ended 1 3/4 cents higher, while deferred months settled 3 3/4 to 8 cents higher.
Fundamental analysis: Traders put more emphasis on news Chinese crushers still need 3 MMT to 4 MMT of soybeans for first quarter delivery than on a disappointing weekly export sales tally today. The market recognizes that the Thanksgiving holiday was likely the culprit for the disappointing sales figure.
But gains were limited by news International Grains Council raised its global soybean production and carryover projections for 2012-13, by 3 MMT and 1 MMT, respectively. Plus, the market still expects a record-large South American bean crop.
Technical analysis: January soybean futures remain within their recent gradual uptrend toward former support at the October low of $14.84. To the downside, support stands at the psychological $14.00 level and the November 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 closed with a slight downside bias in Chicago and Kansas City. Minneapolis wheat finished narrowly mixed.
Fundamental analysis: Weekly export sales were disappointing at 279,300 MT, which encouraged traders to take some profits out of the market following gains earlier this week. Talk that Ukraine will allow wheat exports up to 5.8 MMT was also mildly price-negative, although traders are growing tired of the whole saga.
Outside markets were price-supportive today even though the fiscal cliff talk took a more ominous tone today (see "Evening Report for more). Still, a weak dollar helped limit selling interest in wheat futures, as did ongoing drought concerns in the Plains.
Technical analysis: The psychological $9.00 mark is key resistance for March Chicago wheat futures. Spikes above that level have been limited and closes above that mark have been even harder to come by. A close above $9.00 would open upside potential to the November high at $9.29 3/4. Failure to clear $9.00 and find followthrough buying would point the contract to another test of support in the $8.60 to $8.50 area.
Hedgers: 75% cash sold on 2012-crop in the cash market.
Cash-only marketers: 75% of 2012-crop production is sold.
Price action: Several cotton contracts gapped higher on the open and all contracts settled with gains for the day ranging from 25 to 55 points.
Fundamental analysis: Cotton futures benefited from another week of strong weekly cotton export sales of 314,600 running bales (RB), 300,300 RB of which were for 2012-13. Mexico was the lead buyer, followed by China. Traders expect decent demand for China to continue as the nation's economy has recently shown signs of improvement.
Friendly outside markets, with gains in the stock market and crude oil futures and losses in the U.S. dollar index, also provided light support.
Technical analysis: March cotton traded through and settled above the November high of 73.15 cents, which has bound upside action throughout the month, making it new support. Followthrough buying tomorrow will be key for signaling an upside breakout has truly occurred.
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.