Price action: Corn futures settled roughly 10 to 14 cents higher through the July contract, which was near session highs. Far-deferred contracts ended narrowly mixed.
Fundamental analysis: Corn futures were supported by concerns South American planting delays will lead to some acres being switched to soybeans. Additionally, rising South American corn prices could shift some demand back to the U.S., although recent softening of Gulf basis signals that hasn't happened yet.
Outside markets were also supportive today, with the U.S. dollar lower and crude oil futures higher. As those markets came off their respective lows and highs, however, corn futures were able to maintain gains, which is a potential positive sign for bulls.
Technical analysis: December corn futures also triggered buy stops as the contract pushed above Tuesday's high and again above the 9-day Moving Average. The contract got a boost Tuesday on the push above the 100-day Moving Average. Tough resistance at the October high of $7.76 must be cleared to signal an upside breakout from the two-plus month sideways trading range.
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 enjoyed followthrough buying today and finished high-range with gains ranging from roughly 9 to 14 cents.
Fundamental analysis: With Superstorm Sandy winding down, fundamental factors are garnering more attention; for the soybean market, that gives bulls the upper hand. The market continues to receive signs that high prices are not slowing demand. This morning USDA announced China had purchased 25,000 MT of soyoil for 2012-13 delivery. Also, basis levels around the country remain strong, emphasizing tight supplies.
But gains were harnessed by recognition that South America is expected to produce a record-large crop and that a delayed start to planting across much of this region will likely result in more acres being switched to beans.
Technical analysis: January soybean futures posted an upside day of trade, but the contract remains within the bounds of a month-long consolidation range, with support at the October low of $14.84 and resistance at the Oct. 15 high of $15.77.
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 firmer throughout the day and ended mid-range. Chicago wheat ended mostly 4 to 8 cents higher; Minneapolis was up roughly 2 to 7 cents and Kansas City finished around 1 to 5 cents higher.
Fundamental analysis: Futures saw spillover support from neighboring pits, as well as from positive outside markets. Weakness in the U.S. dollar index resulted in widespread buying in the commodity markets, although it was tempered by choppy action in the U.S. stock market.
News Egypt purchased Romanian, Russian and French wheat limited buying, as it reminded traders U.S. supplies are still not competitive on the global market. Traders are also uncertain about the Ukrainian wheat export ban that was announced last week, as ag officials in the country today said no official documents have been prepared (see "Evening Report" for more).
Traders are also keeping a close eye on conditions in the U.S. Central and Southern Plains, as emergence has been hampered by a lack of much-needed rains. Early harvest results in Australia also point to a disappointing crop, as protein levels are lower than expected.
Technical analysis: December Chicago wheat futures spent much of the day pivoting around yesterday's high of $8.66 1/2 and closed just beneath it. The contract remains within the bounds of the downtrending channel. Tomorrow, downtrending resistance intersects at $9.16 and downtrending support intersects at $8.33. Futures are currently near the middle of the downtrend.
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 saw two-sided trade and in the end finished near session lows to close 44 to 85 points lower.
Fundamental analysis: Early support came on weakness in the U.S. dollar index and spillover from general commodity buying. But as the day progressed, buying dried up and focus returned to the plentiful supply situation. Cotton futures need a dose of fresh demand news to interest market bulls. Traders will have to wait until Friday for the weekly export sales data, as it has been delayed due to the two-day shutter of the Federal government.
Technical analysis: December cotton futures posted a downside day of trade on the daily chart and violated support by posting a monthly low. This makes bears' next target the contract low posted in June at 64.61 cents. Futures have a lot of work to do in order to return to the top of the extended choppy trading range, which is marked by the October high of 79.19 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.