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Morning Outlook

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Overnight Highlights

·         Greek’s prime minister lashed out at that country’s creditors, accusing them of making “absurd proposals” in talks to unleash aid for the country.

·         As a result, little progress was seen in Greek talks over the weekend, yielding a weaker euro and a stronger dollar overnight, with commodity prices under pressure.

·         Argentine crush workers agreed to a 27.8% pay raise at the end of last week, settling a strike that had delayed soybean, soymeal and soyoil shipments.

·         However, another powerful union is threatening to block exports starting today as it seeks a settlement, with a national strike of all unions expected next week.

·         November soybeans slipped to new contract lows on the crush worker’s settlement, with July sitting just above recent lows.

·         Soyoil prices continued to find strength from Friday’s EPA announcement supporting biodiesel, but it still wasn’t enough to keep soybeans above water.

·         Corn futures consolidated just above recent lows ahead of this afternoon’s USDA crop progress report that will take another look at crop ratings amid favorable growing conditions.

·         Weekend rains eliminate the dries spots in the Eastern Midwest.

·         Wheat behaves as if it doesn’t want to go lower, even though the charts don’t look very good following last week’s collapse. Watch harvest results from the Southern Plains as fields begin to dry out.

·         A break in Southern Plains this week will see a gradual return of showers next week favoring Kansas, Oklahoma and the Delta.

Commodity Weather Group Forecast

In the Midwest/Delta, weekend rains favored east-central SD, southern MN, WI, MI, central/southern MO, central/southwest IL, central/northern IN, northern OH, AR, central TN, northern LA, and MS. Driest spots in the eastern Midwest eased, with recently drier spots near the OH River some of the wettest spots earlier in the spring.

Rains return to the northwest Midwest at mid-week and then scatter into central/southeast areas by next weekend, causing minor slowdowns to late soy seeding. Occasional showers scatter into the western Midwest in the 6 to 15 day, but the wettest weather should focus on the southern Midwest/Delta.

The return of rains to recently wet AR/LA/MS wheat will need to be watched into the 16 to 30 day, but the near-term break will help to reduce concerns. The eastern Midwest has shifted slightly drier in the 16 to 30 day, but temperatures remain seasonable. Corn/soy conditions should be stable during June given the lack of notable heat/dryness.

In the Plains, weekend showers favored southern/western parts of the TX Panhandle, northern TX, eastern OK, southeast/far western KS, western NE, and the ND/SD border. Rains will be more limited into early next week, helping to ease concerns with flooding and wheat quality in TX/OK and patchy sections of southern KS. Rains gradually return in the balance of next week and need to be watched, favoring KS/OK. The 16 to 30 day remains showery, but the extent of wetter than normal conditions is more limited on today’s outlook. This may help to prevent wetness concerns from expanding as harvest increases.

A freeze western Manitoba and along the Saskatchewan border may have caused some canola damage yesterday morning. Rains this week in the N. Plains and the N. Plains/Canada in the 11 to 15 day aid spring wheat canola.

Dryness Scaled Back in Russian Winter Wheat After Weekend Showers; Germany/Poland Rains Chances Wane. Weekend showers in western Volga/northern South Russia narrowed dryness to 1/4 or less of Russian winter wheat, although limited rain chances are expected in the next 10 days. Germany/Poland dryness concerns continue to build.

Lack of Showers and Potential Heat in N. China Plain Draws Down Moisture for Dryland Corn/Soy. Limited shower activity in the next 2 weeks along with the threat for 90s to low 100s in the 6 to 15 day keeps concerns elevated for developing dryland corn/soy stress across the N. China Plain (~10% of corn/soy belt as a whole).

Morning Market Snapshot

 

All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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