Price action: Corn futures firmed slightly after a steady opening but then lost ground through the remainder of today's session to close near the lows of the day. December through July 2014 contracts finished 4 1/2 to 4 3/4 cents lower.
Fundamental analysis: Corn futures were pressured by traders reapplying long soybean/short corn spreads. Futures also lost ground as traders returned their focus to the start of harvest, which will bring increased pressure on basis.
Traders brushed aside news of an export sale of 180,000 MT of 2013-14 corn to Columbia. This comes on the heels of a 2013-14 export sale to Mexico on Monday and hints prices may have fallen far enough to spark some exporter interest. But with harvest picking up, it's going to take strong demand news to fuel buying interest.
Technical analysis: December corn futures tested support at Monday's lows but closed at their lowest level since Aug. 14. The August low of $4.45 3/4 also offers support. If that level is violated, psychological support starts at $4.40 and then drops to $4.25. December futures need a close above $5.00 to suggest the low has been posted.
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: Soybeans futures finished mostly around 4 cents higher after posting double-digit gains in overnight trade. Most contracts ended mid-range.
Fundamental analysis: Soybean futures were supported by the disappointing crop condition ratings from USDA yesterday afternoon. Instead of the expected one-percentage-point jump in the "good" to "excellent" ratings, USDA showed no change in the top two categories. This fueled a round of short-covering and long soybean/short corn spread unwinding. But with harvest activity picking up and corn futures under pressure, soybeans struggled to maintain buying interest, suggesting bears will have a hard time finding sustained buying interest unless bullish demand news surfaces.
Funds, who have been on the short side of the market the previous three sessions, were net buyers of 3,000 contracts (15 million bu.) of soybeans today. Overall, funds continue to hold an aggressive long position in soybeans.
Technical analysis: November soybean futures must close above the June high of $13.33 and the top of the now-filled Aug. 26 chart gap at $13.48 to signal a short-term low is in place. If the contract simply pauses after the sharp down move the past week-plus, it would suggest the correction is going to extend deeper. Key near-term support is at the psychological $13.00 level and $12.97. A drop through those levels would make $12.25 the next level of strong support.
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 opened under pressure, but buying interest returned late morning. SRW wheat finished roughly 3 to 4 cents higher while HRW wheat finished steady to 7 1/4 cents higher. HRS wheat spent most of the day in positive territory and ended mostly 3 to 6 cents higher.
Fundamental analysis: Winter wheat markets were initially pressured by spillover from weakness in corn and the forecast for rain in winter wheat areas of the U.S., but this gave way to buying when the market learned that frost hit Argentina's wheat belt overnight and that more potentially damaging cold temps are possible through the weekend.
Export demand remains an underlying source of solid support, especially considering that recent export data proceeded last week's large price break in the U.S. dollar index. But U.S. wheat is still facing a competitive battle from Black Sea origin shipments.
Technical analysis: December SRW wheat futures posted another mild upside day of trade, but the contract has not yet challenged resistance at last week's high of $6.62 1/2. A move through this level would set the stage for a challenge of the August high of $6.76 1/2. Contract-low support is 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 enjoyed gains for most of the day and the market ended 18 to 42 points higher, which was a mid-range close for most contracts.
Fundamental analysis: Cotton futures benefited from concerns about the delayed development of the crop today, as USDA yesterday indicated that 47% of the crop is opening bolls, compared to the five-year average pace of 62% for this time of the year. Harvest of the crop is also lagging at just 5% complete compared to 10% on average.
USDA raised the amount of cotton rated "good" to "excellent" by 1 percentage point to 44%, but rains in the South with roughly half the crop opening bolls raises potential quality concerns.
Technical analysis: December cotton futures continued on their uptrending path since the start of the month, with bulls' next target standing at last week's high of 85.78 cents, followed by the 38% retracement of the August to September price slide at 86.55 cents. Support is layered from the September low of 82.11 cents to the June low of 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.