Price action: December through July corn futures softened into the close to finish 6 to 7 3/4 cents lower. Deferred contracts settled narrowly mixed.
Fundamental analysis: Strength in the U.S. dollar index and a lack of fresh news due to USDA being closed for Columbus Day kept corn on the defensive into the close. Traders are also more actively evening positions ahead of Thursday's reports, which could result in choppy price action ahead of the report as traders look for USDA to lower carryover (see "Evening Report" for more).
Concerns about global economic weakness supported the dollar index today, which in turn resulted in widespread weakness to the commodity markets to stall the recovery from the September low in the Continuous Commodity Index.
Technical analysis: December corn futures posted a downside day of trade and violated support at last week's low of $7.46. The low-range close gives bears momentum heading into the upcoming session. Next support is the September low of $7.05. Resistance stands at the October high of $7.68 1/2.
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 pressure throughout the day and ended mid- to low-range with losses of 1/4 to 11 cents through the September 2013 contract; farther deferred months were firmer. Soymeal closed mixed while soyoil ended with slight losses for the day.
Fundamental analysis: Today was a quiet news day. Thus, dollar strength allowed bears to take control of the soybean market. Traders are also proving more willing to reduce than to add risk ahead of USDA's Crop Production and Supply & Demand Reports Thursday. Pre-report expectations are for USDA to raise both its production and carryover estimates from last month to 2.77 billion bu. and 134 million bu., respectively.
News Brazilian soybean farmers are waiting for more rain before planting more beans helped limit pressure on nearby contracts today.
Technical analysis: November soybean futures continue to chop in October's narrow trading range. The high of $16.00 and low of $15.04 for the month mark near-term resistance and support, respectively.
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 favored a firmer tone in light and choppy trade today and finished slightly higher in most contracts at all three exchanges.
Fundamental analysis: Wheat futures were supported by global crop and weather concerns. Dryness remains an issue in several key production areas, including U.S. winter wheat areas and in Western Australia. Additional support came from light short-covering as traders prepare for USDA's Supply & Demand Report Thursday morning.
Wheat traders ignored a general risk-off attitude today. While strength in the U.S. dollar limited buying interest in wheat, it didn't put pressure on the market, which was surprising given that U.S. wheat is currently not competitively priced on the global market.
Technical analysis: December Chicago wheat futures continue to hover just above key support at the September low of $8.49 1/4. Clear violation of that level would signal a downside breakout from the extended, choppy range, which would open downside risk to the bottom of the early July gap area at $8.15.
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 finished with slight gains following light and choppy price action.
Fundamental analysis: Cotton traders brushed aside negative outside markets and a general risk-off attitude among investors today. Instead, cotton traders mildly covered short positions as they began evening positions ahead of Thursday's Crop Production and Supply & Demand Reports from USDA. More light and choppy trade is likely the next two days.
News the World Bank downgraded its Chinese economic growth forecasts for 2012 and 2013 curbed investors' risk appetite today. Slowing economic growth is not good news for cotton export demand, but this is already "known" and factored into prices.
Technical analysis: Near-term support for December cotton futures lies at the Oct. 1 low at 70.22 cents. Below that, support is layered from the July low at 69.40 cents to the contract low at 64.61 cents. To the upside, resistance is clustered around the 77.00 cent area.
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.