Price action: Corn futures ended near session highs with gains of 12 to 15 1/4 cents through the September contract. Deferred months were around 8 cents higher.
Fundamental analysis: Strong gains in the soybean market encouraged corn traders to shift their attention back toward the supply side of the market today. Recent improvement in corn basis around the country remind traders that corn supplies are limited. Plus, some farmers are thought to be storing corn in hopes of higher prices.
Also, today's weekly corn export sales tally of 166,700 MT met expectations, which was an improvement from recent reports. However, this is still a low sales figure. A steady stream of demand news will be needed for corn to further its rally as demand destruction has occurred.
Technical analysis: December corn futures settled high-range, which puts the ball in bulls' court to start the overnight session. Their initial target is the October high of $7.76. Near-term support is at last week's low of $7.32 1/4, followed by the September low of $7.05.
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 strengthened as the day progressed and ended 30 1/2 to 38 cents higher in the November through May contracts. Deferred months saw gains in the teens to 20s. Soymeal and soyoil enjoyed strong spillover support.
Fundamental analysis: Soybean futures benefited from short-covering today amid recent signs more rationing is needed as well as ideas the downside has been overdone. Today's rally was especially impressive considering strength in the U.S. dollar index.
While this morning's weekly export sales tally of 525,200 MT (mostly for 2012-13) fell short of expectations, commutative soybean exports are running 35% ahead of last year's pace, which is well above the pace needed to meet USDA's export forecast for a 7% decline. Plus, harvest is wrapping up and more producers are opting to store beans, which further tightens supplies.
Technical analysis: November soybean futures erased this week's losses and are back within last week's trading range. Near-term resistance is last week's high of $15.74 while support is at the psychological $15.00 level, followed by Monday's low of $14.85 3/4.
Hedgers: 100% sold on 2012-crop in the cash market for harvest delivery. The Nov. $14.00 put options purchased for 42 3/8 cents on 25% of 2012-crop should be held as a crop insurance hedge.
Cash-only marketers: 75% sold on 2012-crop production for harvest delivery.
Price action: Wheat futures finished roughly 7 to 12 cents higher in Chicago, mostly 8 to 9 cents higher in Kansas City and 3 to 8 cents higher in Minneapolis. That was a mid-range close at all three exchanges.
Fundamental analysis: Wheat futures rode the coattails of strong gains in the soybean market today. Also supportive was the long-term weather outlook from the government, which calls for above-normal temps and below-normal rainfall for much of the Plains through January. But traders were also cognizant of strength in the U.S. dollar index, which kept the market from extending further to the upside and pulled futures off session highs into the close.
Weekly export wheat sales were stronger than anticipated at 410,000 MT. While there's decent demand for U.S. wheat, prices aren't competitive enough to trigger aggressive purchases. Traders remain hopeful that will change down the road, however, as exportable supplies from the Black Sea region tighten (see "Evening Report" for more).
Technical analysis: The general technical trend for December Chicago wheat futures remains sideways, with a slight downward bias. Key support lies at Monday's low at $8.40 1/4. A close below that level would signal downside breakout from the sideways range.
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 rebounded from sharp price pressure earlier in the session to close just 14 to 82 points lower.
Fundamental analysis: Fears of a supply squeeze that triggered a sharp rally in cotton futures the past two days dissipated today. As a result, buying interest dried up and hedge-related pressure built as commercials and farmers took advantage of the two-day price surge. But a strong weekly export sales tally allowed cotton futures to come well off session lows late.
Weekly export cotton sales were strong at 206,200 running bales for 2012-13 and 13,200 bales for 2013-14. China was the lead buyer, purchasing 97,300 bales. While China hasn't been a consistent, active buyer of U.S. cotton, the country continues to buy on price breaks.
Technical analysis: December cotton futures managed to close above old resistance at 77.49 cents again today, but must find sustained buying interest at that level. A quick close below that mark would signal the upside breakout attempt was a bull trap.
Hedgers: 50% priced on expected 2012-crop production via cash forward contract for harvest delivery.
Cash-only marketers: 50% priced on expected 2012-crop production via forward contract for harvest delivery