Price action: Corn futures finished around 1 cent lower today following light trade that featured a narrow daily trading range.
Fundamental analysis: The price slide in corn futures continued today as traders expect USDA to report a record crop on Friday. While the record supplies and big jump in carryover are already "known," there's no strong incentive for speculative traders to actively cover short positions. Any buying ahead of Friday's reports will be limited to modest corrective buying -- and even that's likely to be limited.
Funds were "even" today, marking the third straight day they have been neither net buyers nor sellers. That suggests they are loaded up on the short side of the market as much as they want to be for now, but they also aren't willing to even modestly cover their huge short position.
USDA announced daily sales of 140,000 MT of corn to South Korea and 126,000 MT of corn to an unknown destination. While export demand has definitely perked up, it's not enough to spark buying interest in futures in the face of the record crop.
Technical analysis: December corn futures dipped below the psychological $4.25 mark today. Support is now layered from today's low at $4.24 to the psychological $4.00 mark, with the contract low just below that at $3.98 1/4. To the upside, old support at $4.45 3/4 is the first hurdle bulls must clear to give an indication the contract is working on a short-term low.
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 traded higher in overnight action but slumped shortly after the start of the day session and closed low-range. Futures finished 1 to 6 cents lower with the January contract leading declines.
Fundamental analysis: Soybean futures moved lower after the open of the day session on strength in the U.S. dollar index and the overall bearish attitude in the grain complex. Traders are lightening their long exposure ahead of USDA's November crop reports Friday morning, which are expected to show a bigger crop estimate.
The market found light support in early trading on news Brazil may raise its biodiesel blend requirement for diesel fuel as soon as January from 5% to 7%. If enacted the increase would imply around 10% more of the country's 2013-14 crop would be crushed and therefore, not exported as raw soybeans.
Gulf basis levels also rose, hinting there may be some more export news in the future, but traders view positive export news as already factored into prices.
Technical analysis: January soybean futures slipped to their lowest close since Aug. 15 and closed right at the lows of the previous two days. Bulls take heart that the limited amount of action marked underneath the lows of the past two days did not trigger a wave of sell stops. Resistance rests at $12.61 1/4 with the next level of support at $12.31 3/4.
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: SRW wheat futures ended 6 to 8 cents lower, HRW wheat finished 3 to 7 cents lower and HRS wheat closed 3 to 6 cents lower.
Fundamental analysis: Wheat futures continue the slide from the October high as momentum has shifted back solidly to bears. Much of the pressure today was tied to improved winter wheat crop condition ratings from USDA yesterday afternoon and favorable growing conditions across much of winter wheat country. Rains are forecast for much of the Plains and Midwest this week.
Also, Ukraine's ag minister says winter wheat seedings in his country are down only 400,000 hectares from year-ago, much less than feared earlier. Plus, the crop that was seeded is in very good condition. That removes much of the Black Sea supply concerns that helped support wheat futures on their corrective rally from mid-September to the October high.
Technical analysis: December SRW wheat futures have retraced 75% of the September/October recovery rally and the contract appears destined to completely wipe out those gains. Support is around the $6.36 area, with the contract low at $6.35 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 settled 1 to 24 points lower following a two-sided day of trade. Futures ended roughly mid-range.
Fundamental analysis: Trade was light and choppy in the cotton market today as traders await USDA's crop update on Friday. While recent heavy price pressure would suggest traders are likely to cover short positions ahead of the report data, there's a hesitancy to lighten short positions amid concerns with Chinese demand. With China already sitting on an estimated 60% of global supplies and speculation the Chinese government could soon start selling those massive reserves onto the domestic market, there are concerns Chinese imports will dry up.
Ongoing harvest pressure is also a weight on the market. As of Sunday, only 43% of the cotton crop was harvested, meaning there's still a ways to go until seasonal pressure eases.
Technical analysis: December cotton futures closed lower for a 13th consecutive session today and is heavily oversold based on the short-term Relative Strength Index, suggesting a correction is due. But the cotton market has proven in the past it can remain in highly oversold (or overbought) territory for an extended period without a significant correction.
Hedgers: 50% of 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop is sold in the cash market.
Cash-only marketers: 50% sold on 2013-crop production.