Price action: Corn futures did not stray far from unchanged today and ended within a penny of that level, with the December through July contracts favoring the downside and far-deferred months the upside.
Fundamental analysis: A lack of fresh news in the corn market today and limited trading volume due to Hurricane Sandy limited action in the corn pit to position evening as traders work to find a price that balances supply and demand. While the supply situation remains tight, keeping basis levels elevated, high prices have also slowed demand.
Dollar strength and this morning's weekly export inspections data caused nearby contracts to favor the downside. While corn export inspections topped expectations, the commutative export pace dropped to 36.6% behind year-ago. USDA expects exports for the 2012-13 marketing year to lag last year by 25.5%.
Technical analysis: December corn futures tested and respected support at the bottom of the market's month-long choppy trading range around $7.32, marking it as tough support. A move below this level would open downside risk to the September low of $7.05. The October high of $7.76 marks the upper parameter of the trading range and initial resistance.
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 faced liquidation pressure today to end 20- to 30-plus cents lower. Meal and soyoil saw spillover pressure.
Fundamental analysis: The lack of fresh demand news and negative outside markets led to sharp price pressure in the bean pit today. With equity markets closed due to the dangers associated with Hurricane Sandy, traders rushed to the sidelines and lightened their long exposure to the market.
Additional pressure came from beneficial weekend rains in areas of Brazil, although Mato Grosso remains hot and dry (see "Evening Report" for more). Traders are still optimistic record soybean production in South America this year will help to relieve the tight stocks situation.
Technical analysis: November soybean futures posted a big downside day of trade on the daily chart to violate uptrending support drawn off recent lows. Followhrough pressure tomorrow would have bears targeting the October low of $14.85 3/4. Resistance stands at last week's high of $15.74 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 were unable to maintain overnight price gains and finished slightly lower in most contracts at all three exchanges.
Fundamental analysis: Wheat futures succumbed to heavy spillover pressure from soybeans and general risk-off movement today. A lack of fresh supportive news also contributed to the weak price tone.
Weekly wheat export inspections were disappointing at just 9.7 million bushels. This reiterated that U.S. wheat prices are not competitive on the global market, limiting export demand. While Ukraine will soon cease moving wheat onto the world market, there is still plenty of competition for U.S. supplies.
Technical analysis: Key support for December Chicago wheat futures lies at the October low of $8.40 1/4. The bottom of the downtrending channel intersects at $8.34 1/2 Tuesday.
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 settled with slight gains following a quiet day of trade.
Fundamental analysis: While price action was light and gains were minimal, cotton futures stood tall in the face of general risk aversion today. More light trade is likely tomorrow -- and possibly longer -- as the East Coast is hammered by Hurricane Sandy. The key will be whether liquidation pressure is again avoided as there's very little likelihood cotton futures will find sustained buying interest until market conditions return to "normal."
Technical analysis: If you take out the big, mid-month price surge and the subsequent sharp price drop, December cotton futures appear "comfortable" in a range from around 70.00 cents to 73.00 cents. An upside push from that range would leave tough resistance at the 77.00-cent to 79.00-cent area, while additional support is in 69.00-cent to 64.00-cent range.
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.