Price action: Corn futures were weaker through overnight trade and the day session. September corn ended 14 1/4 cents lower, while new-crop contracts finished around 4 cents lower and in the lower end of today's range.
Fundamental analysis: Corn traders continue to brush aside the late-season heat and dryness, which is pushing crop maturity and trimming yield potential. Early harvest efforts in parts of the Corn Belt are pressuring basis across the countryside, and active harvest is quickly approaching as the crop rushes to maturity, which is acting as a wet blanket on futures. Additionally, traders have negative attitudes. Aside from some possible short-covering ahead of Thursday's crop reports from USDA, near-term buying is likely limited.
Funds were light sellers today, selling a net 4,000 contracts (20 million bu.) of corn. Funds are again adding to their short position in the corn market.
Technical analysis: Key near-term support for December corn futures lies at last week's low at $4.57. A drop through that level would open the downside to the August low at $4.45 3/4. Below that level, support is heavily layered from $4.40 to the contract low at $3.98 1/4. To the upside, the $4.90 level is resistance as buying interest dried up above that level on the last bounce attempt.
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 saw strength overnight and early this morning, but this gave way to profit-taking. September beans settled 32 3/4 cents lower while November and January beans ended 11 1/4 and 9 1/2 cents lower, respectively. Farther deferred months finished 1 to 4 cents lower.
Fundamental analysis: Ideas the impact of recent and continued hot, dry conditions on yields is already factored into prices opened the door for some profit-taking today, which triggered some technical selling pressure. In addition, some market participants still believe a rain could help the crop add bushels and that weather concerns are overstated.
Pressure on deferred contracts was limited by some positive demand news today. Namely, China' soy imports in August were up 44.1% over year-ago and recent data from the country signals its economy is stabilizing. Also, a 10-cent jump in Gulf basis for immediate delivery may signal some bargain buying is occurring among exporters.
Technical analysis: November soybean futures narrowly missed posting a bearish reversal for the day, and bears will have the upper hand to start the overnight session. Support is layered from the September low of $13.35 to the bottom of the Aug. 26 upside gap at $13.31 1/2.
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: Wheat futures briefly firmed in early daytime trade, but as pressure in neighboring corn and soybean markets built, wheat extended losses. SRW wheat ended 5 1/2 to 7 1/4 cents lower, with HRW down 4 1/2 to 7 3/4 cents. HRS ended 7 1/2 to 10 cents lower.
Fundamental analysis: A weaker U.S. dollar index initially limited losses in the wheat market, but a lack of fresh news and corn extending losses ultimately weighed on wheat futures today. Traders even got some positive demand news in the form of the weekly export inspections report that showed inspections within expectations and the cumulative pace above what's needed to reach USDA's export forecast.
Forecasts for rain across the Southern Plains this week added to the weaker tone, although soil moisture deficits across the region have worsened amid excessive heat.
Technical analysis: December SRW wheat futures posted an inside day down on the daily chart. The low-range close gives bears the upper hand heading into overnight trade. Futures are hovering just above contract-low support of $6.35 1/2.
Hedgers: 50% of 2013-crop is sold in the cash market. 100% sold on of 2012-crop.
Cash-only marketers: 25% of 2013-crop is sold. 100% sold on 2012-crop.
Price action: Cotton futures settled with slight gains and near the middle of today's range.
Fundamental analysis: Light short-covering and modest bargain buying supported cotton futures today as traders prepare for Thursday's September crop reports from USDA. While active buying is unlikely, traders may want to further lighten short positions ahead of the data.
Traders are also closely monitoring export demand to see if the recent, sharp price break triggers increased export demand. On that front, news surfaced over the weekend that the Chinese government will begin to stockpile new-crop cotton supplies, which could boost Chinese mill demand for imported cotton. There has been talk recently that China would end its cotton stockpiling program in favor of a farmer-subsidy policy.
Technical analysis: December cotton futures are at the bottom of the extended, sideways range. Key support lies at 81.72 cents. A drop below that level would likely trigger sell stops. But if that support holds, the contract is likely to bounce.
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. 100% sold on 2012-crop in the cash market.
Cash-only marketers: 50% of expected 2013-crop production is sold via cash forward contract for harvest delivery. 100% sold on 2012-crop.