Price action: Corn futures mildly favored the upside overnight, but faded as the day progressed and closed mostly around 4 to 5 cents lower and near session lows.
Fundamental analysis: Corn futures were initially supported by strength in the wheat market. But with the U.S. dollar index firmer and the soybean market under heavy pressure, buying interest dried up in the corn market. Uncertainty ahead of Tuesday's presidential election and Friday morning's USDA reports also contributed to today's weaker price performance, as traders weren't willing to add new long positions.
Forecasts calling for improved weather in southern Brazil also weighed on corn. With the optimal planting window for corn closing, traders sense more favorable conditions could lead to a sharp increase in the planting pace. But conditions remain too wet for corn planting in many areas of Argentina.
Technical analysis: December corn futures remain hemmed within the range from the September low of $7.05 to the October high of $7.76.
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 slightly lower in overnight trade, but losses were extended with the start of open-outcry trade and futures continued to slide. November through August futures ended with double-digit losses, with nearby contracts ending 20-plus cents lower. Losses for far-deferred contracts were much lighter. Meal and soyoil saw spillover pressure.
Fundamental analysis: Early pressure came from strength in the U.S. dollar index and improved weather for South America (see "Evening Report" for more). Northern production regions of central and eastern Brazil are in line for more rains this week, which caused traders to lighten their long exposure to the market.
Traders generally ignored this morning's lofty soybean inspections report, as it was within expectations and traders are more focused on evening positions ahead of Friday's USDA reports. Traders look for USDA to raise the size of the soybean crop from last month, but that could be offset by an increase in projected exports.
Technical analysis: January soybean futures gapped slightly lower on the open but filled the gap by matching Friday's low before extending early losses. The contract ended above the $15.00 level, which is initial support overnight, followed by the October low of $14.84. Resistance stands at last week's high of $15.71 and extends to the October high of $16.00 3/4.
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 favored a firmer tone throughout the morning, but softened in afternoon trade as soybeans extended losses. Nearby wheat at all three exchanges ended steady to slightly higher, with deferred contracts mixed.
Fundamental analysis: Strength in the U.S. dollar index limited gains throughout the day, but traders' focus was on the tightening global supply situation. Australia's largest exporter, CBH, lowered its estimate of the Western Australia crop and traders remain concerned the HRW wheat crop in the U.S. Central and Southern Plains will not get enough moisture to assure a solid stand before dormancy (see "Evening Report" for more).
But without fresh demand news, wheat was vulnerable to profit-taking into the close, as traders have been reminded recently that U.S. wheat is not competitively priced on the global market.
Technical analysis: December Chicago wheat saw limited trade above Friday's high of $8.73 3/4 and finished near session lows, which was still good for slight gains. Near-term boundaries are support at last week's low of $8.52 3/4 and resistance at the Oct. 24 high of $8.95.
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 out a light and choppy day of trade with a narrowly mixed tone. The closing price range was 9 points lower to 21 points higher.
Fundamental analysis: Cotton traders weren't willing to add new positions today with the presidential election tomorrow and USDA's November crop reports out Friday morning. Unless traders' attitudes change, light and choppy trade is likely much of this week.
Cotton traders had very little response to strength in the U.S. dollar index today. If the dollar continues to build on recent gains, however, it will eventually weigh on cotton, although traders already have sluggish demand built into prices.
Technical analysis: December cotton futures are consolidating around 70.22 cents after dropping below that support last week. If the contract can stabilize in this area, a short-covering bounce is likely. If last week's low at 69.66 cents is violated, next support is at 67.16 cents and then the contract low at 64.61 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.