Price action: Corn futures closed around 4 cents higher today. After sharp losses Monday in reaction to USDA's Quarterly Grain Stocks Report, futures consolidated.
5-day outlook: USDA will almost certainly not release weekly crop progress/condition data Monday even if the government shutdown ends this weekend (not likely). And it doesn't seem likely USDA will be able to issue its October Crop Production and Supply & Demand Reports, which are scheduled for next Friday, on time. Therefore, traders will need to turn to private crop estimates and harvest reports for price direction.
30-day outlook: Harvest is off to a slow start, but it should pick up quickly unless October weather is overly wet. With harvest progress comes seasonal pressure as new-crop supplies hit the market. But the flow of new-crop corn to market may be relatively light this year as prices are sharply lower than year-ago, producers have plenty of empty bin space and the price structure signals to store corn for spring or summer 2014 delivery. That could help limit seasonal pressure this year and funds are already heavily loaded up on the short side of the market, which should somewhat limit speculative selling.
90-day outlook: For the corn market to put in a low and work appreciably higher, strong demand is needed. The price break is starting to attract increased global end-user buying, but export demand isn't strong enough yet to trigger more than modest corrective buying.
Hedgers: 25% of expected 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 through much of the day, finishing near their daily highs. November futures closed 6 3/4 higher, while deferred contracts finished 4 1/4 to 8 1/2 cents higher.
5-day outlook: Clearing skies following this weekend's rain should allow harvest to resume next week. That could put pressure on prices. Traders will watch for how prices perform early next week as futures have corrected since marking a low Monday. USDA's Crop Production and Supply & Demand Reports next Friday are up in the air given the government shutdown.
30-day outlook: With harvest likely to start in earnest next week, seasonal pressure is likely to build. In addition, market structure encourages farmers to sell for immediate delivery rather than store. With supplies moving to market and refilling supply pipelines, look for cash prices to suffer as basis softens. But with global demand for soybeans strong, traders will watch for signs end-users are using the decline in price to ramp up purchases.
90-day outlook: With old-crop supplies well depleted, it will take a while for the pipeline to fill to comfortable levels. But once the bulk of the harvest has moved into market channels, look for prices to firm again as the market has to again ration supplies. The recent price break is doing nothing to discourage demand. In fact, it's likely to encourage more end-user buying.
Hedgers: Get to 100% sold in the cash market on expected 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on expected 2013-crop production.
Price action: Wheat futures closed mixed at all three exchanges today, with nearby contracts slightly weaker and far-deferred contracts mildly firmer.
5-day outlook: Next week's price action could well determine if short-term tops are in place or if the wheat market will build on the price recovery. For the price recovery to extend, the wheat market likely needs a shot of fresh demand news. USDA's Supply & Demand Report should show a reduction in projected 2013-14 ending stocks, but the scheduled Friday release of that report is up in the air amid the government shutdown.
30-day outlook: Late summer and early fall rains through winter wheat country are creating a favorable environment for wheat seedings and crop emergence. Plus, winter wheat seedings are expected to be steady to up slightly from year-ago. That will make it difficult to spark sustained buying interest if there isn't a consistent flow of bullish demand news.
90-day outlook: The long-term price outlook for wheat is favorable. By the end of the 2013-14 marketing year, U.S. wheat stocks could be borderline tight and export competition from the Black Sea region is expected to be reduced for 2014-15 due to planting problems.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 25% of 2013-crop is sold.
Price action: Cotton futures ended mixed with the front-month contract 4 points higher and December through May contracts settling near session lows with losses of 50 to 59 points. Far-deferred months saw lighter losses. Most contracts still edged out slight gains for the week.
5-day outlook: USDA is slated to release its Crop Production Report next Friday, which would typically prove an important price driver next week, but with the government shutdown ongoing, whether this data will be released is uncertain. Informa Economics reportedly said it expects USDA to raise its cotton production estimate by 810,000 bales from the month prior to 13.709 million bales.
30-day outlook: Late-season rains in the U.S. Southeast have caused cotton crop conditions to decline, spurring both yield and quality concerns. If worries mount, futures could push higher for an upside breakout from the broad, sideways range.
90-day outlook: The longer the government shutdown drags on, the greater the impact on the U.S. and global economy (See "Evening Report" for more). This could slow Chinese cotton demand, which is already in question due to talk the country may wind down its stockpiling program.
Hedgers: 50% of expected 2013-crop production is hedged in December cotton futures at 83.87 cents. 50% of expected 2013-crop production is also sold via cash forward contract for harvest delivery.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery.