Price action: Corn futures enjoyed slight gains for most of the day session and finished roughly 1 to 2 cents higher for the day. Funds bought 4,000 contracts (20 million bu.) of corn today.
Fundamental analysis: The corn market saw mild short-covering to start the week on reminders that lower prices are rebuilding demand and on a continuation of last week's spread unwinding with soybeans. USDA announced a 197,200-MT 2013-14 corn sale to Mexico this morning, and weekly corn inspections represented solid demand.
But buying interest will likely remain limited to short-covering as harvest is picking up in the Corn Belt and USDA is forecasting a record-large crop. Traders expect USDA to show harvest is 11% complete as of Sunday in this afternoon's crop progress update.
Technical analysis: Despite posting gains for the day, the December corn contract remains in a steady downtrend toward the August low of $4.45 3/4, which marks the lowest level for a lead-month contract in nearly three years. The contract must move back above the $5.00 mark to signal a trend reversal is underway.
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 saw choppy trade this morning, but the market ultimately posted a low-range close with losses of 5 1/4 to 7 1/2 cents through the March contract. Deferred futures were mixed.
Fundamental analysis: Followthrough pressure after last week's losses is a clear clue that a near-term high has been posted. Seasonal price pressure is building as traders recognize that harvest activity will begin to pick up, especially in southern locations. While yield reports will remain highly variable this year, fresh supplies will weaken basis.
However, traders will continue to keep a close watch on demand, as a surge in foreign purchases would signal prices have fallen far enough. This morning's weekly export inspections report showed inspections have picked up, with 16.793 million bu. shipped in the latest reporting period, coming in well above traders' expectations.
Technical analysis: November soybean futures posted a downside day of trade on the daily chart. Consecutive closes below the bottom of the late August gap area opens additional near-term downside risk. Bears' next target is the July high of $12.97.
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 closed 5 to 7 cents higher, HRW futures ended 4 to 5 cents higher and HRS futures finished 1 to 2 cents lower in the most actively traded contracts.
Fundamental analysis: Wheat futures were generally supported today by short-covering amid ideas the downside has been overdone. Hopes for improved demand were also supportive as China National Grain and Oils Information Center raised its Chinese 2013-14 wheat import forecast to 7.5 MMT. However, much of that business has already been booked. And USDA's current Chinese 2013-14 wheat import forecast is already at 9.5 MMT.
Given recent rains across the Plains, it's going to be difficult for the wheat market to generate sustained buying interest. With soil moisture conditions generally the best they've been in years, there's talk HRW wheat plantings could rise from year-ago.
Technical analysis: The first hurdle for December SRW wheat futures is last week's high at $6.62 1/2. More critical resistance stands at the Aug. 26 high at $6.76 1/2. Clearing that level would open the door for an extended price recovery. To the downside, contract-low support lies at $6.35 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 ended slightly lower through the May contract, while farther-deferred contracts posted slight gains.
Fundamental analysis: Cotton futures faced light profit-taking pressure today as the market pulled back from gains the past two weeks. Selling interest was limited, however, by upbeat manufacturing data out of China. With factory activity expanding amid improved export orders, there's some hope China could import more cotton. But tempering those hopes is the realization that China is already sitting on over half of the world's cotton supply.
Parts of the South got heavy rains over the weekend, which spurred some potential quality issues with the crop. But given the later-maturing crop this year, those concerns are limited.
Technical analysis: December cotton futures are at a critical level technically. A push above last week's high would suggest the contract is likely to rally back to the 89.00-cent to 90.00-cent level. If the contract rolls over, a test of key support at 81.72 cents would be likely.
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.