Price action: Corn futures opened higher but quickly lost ground and finished near their daily lows. December through July 2015 contracts closed 2 to 3 cents lower.
Fundamental outlook: Futures opened higher on ideas recent losses were overdone and in reaction to the updated release of Prevented-Plant acres from USDA's Farm Service Agency. But prices sold off as soybean futures collapsed and rains swept through the western Corn Belt this morning with forecasts of more rain due this week.
With harvest underway and soon to be active across the Corn Belt, look for basis levels to extend recent pressure. That pressure will limit the upside for corn futures to corrective buying.
Technical outlook: The slump in December corn futures left prices just slightly under Monday's low of $4.54. Major support rests at the August low of $4.45 3/4. If that support breaks, the next downside target would be $4.40, followed by psychological support every 10 cents lower. Resistance sits at last week's high of $4.73 1/2.
Hedgers: 100% sold on 2012-crop in the cash market. 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 100% sold on old-crop. 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures were highly choppy today and closed mixed. November beans posted a 34 1/2 cent trading range and closed 5 3/4 cents lower. January beans closed 5 1/4 cents lower, with the rest of the market posting gains of 2 1/2 to 5 3/4 cents.
Fundamental outlook: Futures were supported in overnight trade by a drop in crop condition ratings, as well as the increase in Prevented-Plant acres reported by USDA early this morning (see "Evening Report" for more). But limited followthrough buying at the start of daytime trade, combined with rains moving into the Corn Belt, resulted in profit-taking pressure.
Traders believe some of the later planted soybeans (which is a large percentage of the crop), will benefit from this week's rains -- helping to fill pods. As a result, it could be difficult for bulls to regain traction this week.
Technical outlook: November soybean futures tested the bottom of the Sept. 23 gap area at $13.66 1/2, but closed well off session lows to avoid filling the gap. Doing so would hint a high is in the works, but it would take a drop below $13.00 to confirm a high is in place.
Hedgers: 50% of expected 2013-crop production is sold via a forward-price cash contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via a forward-price cash contract for harvest delivery. 100% sold on 2012-crop in the cash market.
Price action: SRW and HRW wheat futures finished mixed with a slight upside bias. HRS futures closed fractionally to 3 cents lower.
Fundamental outlook: Wheat futures were supported by short-covering through overnight trade, but as corn and soybeans turned lower through the daytime hours, corrective buying interest faded in the wheat market. Wheat futures likely need the corn market to lead the way, or at least actively participate, for there to be active short-covering. Wheat also needs a shot of bullish demand news to spark a sustained corrective recovery.
Another limiting factor today was weather as rains are recharging soil moisture across the Plains as winter wheat seeding gets underway. The near-term forecast calls for more rainfall chances, which will make it hard to attract much buying interest.
Technical outlook: December SRW wheat futures continue to hold just above contract-low support at $6.35 1/2. To suggest a short-term low is in the works, the contract must push above the last correction high at $6.76 1/2.
Hedgers: 50% of 2013-crop is sold in the cash market.
Cash-only marketers: 25% of 2013-crop is sold.
Price action: October cotton futures settled 23 points lower, while deferred contracts finished 17 to 60 points lower.
Fundamental outlook: A decline in cotton crop condition ratings in Monday afternoon's update from USDA was mildly price-supportive for cotton futures today. But while crop ratings ticked down, buying interest was limited as key production areas of Texas are expected to get beneficial near-term rains.
Cotton futures were also mildly supported by weakness in the U.S. dollar index today. That helped cotton ignore weakness in the soybean and corn markets.
Technical outlook: December cotton futures must push above last week's high at 85.15 cents to extend the corrective bounce from the Sept. 5 low. A move through that resistance would likely be enough to push the contract toward the middle of the established trading range -- and possibly into the upper end of the range. Failure to move above last week's high could spark another drop toward key support at 81.72 cents.
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.