Price action: Corn futures chopped on both sides of unchanged, but didn't stray too far from unchanged and posted a high-range close with gains around 2 cents.
Fundamental outlook: Periods of price pressure came from reports of solid early yields, which reminds traders that harvest has started. Light early harvest progress has pressured Gulf and country basis levels -- limiting buying interest in futures.
But a sharp weakening in the U.S. dollar index as corn was closing lifted futures into the close. The Federal Open Market Committee did not announce when it would scale back its asset purchases, which disappointed investors and pressured the dollar.
Technical outlook: December corn futures slipped to a monthly low of $4.52, but closed back above the $4.55 level. The contract remains in its downtrend from the August high and if the August low of $4.45 3/4 is violated, it would open significant downside risk on a technical basis.
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 opened weaker but gained strength through the trading day, finishing near the highs for the day. November futures closed 5 1/4 higher, while the January through July 2014 futures finished 7 to 8 cents higher.
Fundamental outlook: Soybean futures opened under pressure as rains moved across the Corn Belt this morning with expectations for more rain due to fall this week. Traders feel these late-season rains will help late-maturing soybeans.
The market registered a muted response to news from USDA this morning of a daily sale of 1.93 MMT of soybeans to China with another 182,000 MT of soybeans sold to an unknown destination. Both sales are for 2013-14 delivery. The market assumes these sales are confirmation of previously announced "goodwill" buys from China and are therefore already priced into the market.
Technical buying dominated trade after the early test of yesterday's lows attracted fresh buying.
Technical outlook: Key near-term support for November soybean futures lies at the bottom of the Aug. 26 gap at $13.31 1/2. That gap was nearly filled Tuesday as futures came within 1/2 cent of testing that support. If that gap remains open, it could trigger a rebound to the top of the three-week consolidation range.
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 wheat futures finished 3 to 4 cents higher, HRW wheat ended mostly 2 to 3 cents higher and HRS wheat was fractionally to 2 cents higher through the July 2014 contract.
Fundamental outlook: Wheat futures were lightly supported by mild short-covering, though buying interest was limited by rains that are recharging soil moisture across the Plains and a lack of supportive news. Wheat got a boost late in the session from a sharp drop in the U.S. dollar index after the Fed opted to maintain all of its bond-buying program.
Unless the drop in the dollar leads to an active pickup in export demand, however, followthrough buying in wheat futures will be limited. While wheat export demand is running much stronger than year-ago, traders still have a belief that U.S. wheat is not competitively priced on the global market to attract enough demand to spark a sustained price rally.
Technical outlook: December SRW wheat futures continue to have a bearish technical tenor as the contract is holding just above contract-low support. To encourage thoughts that a low is in the works, the contract must climb 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: Cotton futures rallied into the close to finish 38 to 106 points higher through the March 2015 contract and finished near session highs.
Fundamental outlook: Two-sided trade was seen in the cotton market for much of the day. Macro-economic factors gave bulls the strong upper hand late in the session as the U.S. dollar dropped sharply after the Fed decided to not start tapering its economic stimulus. If the dollar continues its downward path tomorrow, it's likely cotton futures would build on today's gains.
In overseas news, China has started stockpiling domestic cotton supplies, according to the China Cotton Information Center. While China is expected to end its stockpiling program in favor of a farmer-subsidy policy, traders view even temporary purchases of domestic supplies by the Chinese government as price-supportive. The less domestic supplies Chinese textile mills have to buy, the more likely they are to import greater quantities of foreign cotton.
Technical outlook: December cotton futures are extending their bounce from the low end of the broad, sideways range early this month. If the contract finishes near this week's highs, it would suggest a rally back to the top of the range is underway.
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.