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Morning Outlook

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Overnight Highlights

·         Greek Prime Minister Alexis Tsipras insists that any basis for an agreement must be a Greek proposal. That attitude should tell you everything you need to know about Greece.

·         European stocks are at their second lowest level in nearly a month as bonds continue to tumble amid rising yields due to the Greek impasse. German 10-year bond yields have doubled in the past three days as they rise to one-year highs.

·         Russian-backed troops and tanks have initiated a major offensive in eastern Ukraine.

·         The dollar extended losses to its lowest level since May 19 overnight as yields on European bonds rise amid declining expectations for a U.S. rate hike.

·         The weak dollar provides modest underlying support for the grain and oilseed markets this morning, but the impact appears to be waning as traders tire of the big swings in the currency market.

·         Sprout damage in early wheat harvest loads from Texas Wednesday ran from 2 to 8%.

·         Southern Plains/Delta rains return next week, shifting north again in the 11- to 15-day period.

·         Frequent and locally heavy rains continue to keep late soybean seeding slow in the southwestern Midwest.

·         Dry spots are expected to persist, and even expand, in northern Europe, South Russia and Eastern Ukraine, but with limited heat.

·         More limited 6- to 15-day rains are favored for the Canadian Prairies, adding to dryness concerns.

Commodity Weather Group Forecast

In the Midwest/Delta, thunderstorms favored central MN, northwest MO, northeast KS, and southeast NE in the past day, with relief (even some localized flooding) also noted for many drier sections of the Carolinas. The heaviest totals in the Midwest (locally 5”+) favored spots in far southeast NE and nearby sections of MO/KS.

Showers remain frequent in the southwest Midwest and slow the most notably delayed soy seeding in MO/KS, with the heaviest amounts likely in the next 2 days and again late next week. Midwest/Delta growth is otherwise favored by rains, and a return of wet weather in Delta soft wheat areas next week may ease in the 11 to 15 day. Drier trends may return to the Carolinas in the 16 to 30 day after the near-term relief, but the rest of the Midwest/Delta see seasonable temperatures/rainfall.

In the Plains/Canada, showers favored central MT, southeast NE, and northeast KS in the past day. Rains remain limited for S. Plains wheat into the weekend but return next week, particularly in the 6 to 10 day. This will cause early harvest interruptions in TX, but the wettest weather is expected in KS/CO/northern OK. Rains ease in the 11 to 15 day for TX/OK and focus on the C. Plains, with the 16 to 30 day also wettest in the C. Plains.

Rains remain adequate for N. Plains spring wheat in the next 2 weeks. A few showers favor central Alberta/northern Saskatchewan in the next 2 days and again late in the weekend, with much of the guidance wet in the 6 to 15 day. This would be welcome, but our forecast focuses the best showers on the northwest 1/2 of the belt given recent model wet biases. Drier weather returns in the 16 to 30 day.

N. Germany/N. France Wheat Still at Risk for Dryness; Dry Spots Persist/Expand in S. Russia/E. Ukraine. Poland is likely to see some relief in the next 10 days. Northern France/Germany are at most risk for building stress. Dryness in S. Russia/E. Ukraine will allow dry spots (currently 15% of winter wheat) to expand in the next 2 weeks.

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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