Price action: Corn futures were on the defensive most of the day and trade was restricted to a very narrow range ahead of USDA's Grain Stocks Report due Monday. Futures closed 2 to 3 cents lower near their daily lows but slightly higher for the week.
5-day outlook: Monday's Quarterly Grain Stocks Report will likely drive action as it has a reputation for shocking the market, resulting in limit moves. Traders expect the report to show 688 million bu. in storage on Sept. 1. In addition to the report, the market will watch yield reports and interior basis levels as harvest activity picks up across the Corn Belt. The rise in harvest activity will increase pressure on basis and serve as a wet blanket on futures prices.
30-day outlook: Harvest activity will dominate trade thinking as the large harvest moves from the field into market channels and presses prices lower seasonally. However, a recent uptick in export sales hints prices may be reaching levels that stimulate demand. But the heavy weight of harvest will likely keep a lid on rallies until harvest crosses the 50%-complete mark.
90-day outlook: Traders will watch to see if the extended period of lower prices brought on by the availability of large supplies will eventually stimulate a pickup in demand. The U.S. is still the major supplier of corn to the world and global demand appears to be growing. This suggests prices could see some bounce once harvest is completed.
Hedgers: 25% of expected 2013-crop production is sold via cash forward contract for harvest delivery.
Cash-only marketers: 25% of expected 2013-crop production is sold via forward contract for harvest delivery.
Price action: Soybean futures finished mixed today with the November through March contracts slightly higher and farther-deferred futures slightly lower. November soybeans finished just above last Friday's close after a weaker start to the week.
5-day outlook: USDA's Quarterly Grain Stocks Report will set the stage for price action Monday. USDA typically finds more beans than indicated in the September Supply & Demand Report, but barring a sharply bearish surprise, much of traders' attention will be on harvest activity and whether and fresh demand news surfaces.
30-day outlook: Chinese demand for U.S. soybeans will be strong from now until the 2013-14 South American crop is ready next fall -- it always is. While that will provide strong underlying support, especially on price breaks, traders have grown so accustomed to strong Chinese demand that it may be difficult to generate a lot of fresh buying during harvest.
90-day outlook: Once the U.S. crop is harvested, attention will turn to the South American growing season. Brazilian soybean acres will be up from year-ago and record production is expected. If there are any serious crop problems, however, Chinese demand for U.S. soybeans could be stronger and stretch deeper into the 2013-14 marketing year than anticipated. That would increase the need to actively ration supplies.
Hedgers: Get to 100% sold in the cash market on expected 2013-crop production. We'll manage risk on the board the remainder of the marketing year.
Cash-only marketers: Get to 75% sold on expected 2013-crop production.
Price action: Wheat futures posted slight gains to wrap up the day with the HRS market leading to the upside. For the week, wheat posted strong gains and signaled a post-harvest low is in place.
5-day outlook: USDA's Small Grains Summary and Quarterly Grain Stocks Reports will be in focus next week. Wheat has recently taken on a leadership role, but it could turn back into a follower if U.S. corn stocks data surprises market expectations.
30-day outlook: Daily sales announcements, market recognition of strong weekly export data and a frost scare in Argentina got the market's attention this week. But wheat will likely need a consistent flow of such news to continue its march higher.
90-day outlook: And for a sustained recovery to take place, the corn market will likely also need to rally. Thus, harvest results and how quickly that market rebuilds demand will have a major influence on wheat price action.
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 strong buying interest to wrap up the week; futures settled 97 to 122 points higher through the July contract and with solid gains for the week.
5-day outlook: Cotton futures staged an upside breakout of their recent consolidation range to wrap up the week. Key next week is whether the market sees followthrough buying or if this proves to be a technical head fake.
30-day outlook: This week's Export Sales Report signaled some resistance to higher prices, which could make it tough for cotton to continue higher. But on the other hand, recent rains in the South add quality concerns to the list of worries about the slow-developing and small crop. How the U.S. cotton crop finishes will also play a major role in price action.
90-day outlook: China recently started its 2013 cotton stockpile purchases, but there remains speculation the nation may scrap its stockpiling program in favor of a farmer subsidy program. How this plays out and impacts demand from this holder of more than half the world's cotton supplies will remain a major price driver. The price of the U.S. dollar index will also come into play.
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.