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Morning Outlook

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Overnight Highlights

·         Greek talks with its peer Euro-zone members broke down after 45 minutes Sunday, making Thursday’s meeting of euro-area finance ministers the next deadline for the debt-ridden country.

·         The European Central Bank will meet Wednesday to discuss financing for Greek banks. It is not expected to cut off all support prior to the end of the current debt agreement on June 30.

·         Greek Prime Minister Tsipras will likely need initiate capital controls at some point to prevent Greece citizens from removing all their deposits from banks.

·         Watch to see if the United States pressures Europe to bailout Greece this week due to its strategic geopolitical value.

·         The euro dropped and dollar rallied on the above, with commodity prices slipping lower.

·         China’s top corn-producing region has doubled subsidies to processors to use domestic corn, bringing those subsidies to $1.64 per bushel.

·         The National Oilseed Processors Association is scheduled to release its member soybean crush report for the month of May at 11 a.m. CDT this morning. The trade expects it to show that NOPA members crushed a record for May 147.299 million bushels of soybeans. Our submitted entry was 147.195 million bushels.

·         Traders expect this afternoon’s USDA crop progress report to show improving conditions following warmer weather last week across much of the Midwest.

·         Showers and storms will leave the Southern Midwest wettest this week, but they will shift north and east in the 6- to 15-day period.

·         Heavy rains linger in the far southeastern Plains this week, but eases elsewhere to allow harvest to resume again.

·         Intermittent showers will aid Canada, but amounts so far have been light.

·         Rains benefit Ukraine wheat and corn this week, but may miss part of Russia.

·         Corn, soybean and wheat prices slide lower overnight as money flowed out of the broader commodity complex and amid rising concerns over burgeoning supplies.

Commodity Weather Group Forecast

In the Midwest/South, weekend thundershowers favored southern/eastern IA, southeast NE, central/far southeast KS, central MO, central/northern IL, central IN, northern OH, MI, southern ND, and the Gulf Coast. Rains remain most substantial in the southern Midwest this week and then lift the focus farther north/east in the belt late this week through the 11 to 15 day.

The active storm track will lead to pockets of excess moisture, with the greatest risk in parts of central IL and MO this week. However, the moisture and lack of notable heat will aid corn/soy growth, and some of the wettest spots this month in northwest MO, southeast NE, and northeast KS appear to miss much of the heaviest rain.

Notable rains are limited to the northern edge of the Delta this week, with only minor interruptions to soft wheat harvest in the 6 to 10 day across the north. Heat/dryness concerns focus on Southeast corn, particularly this week in GA/SC with highs in the mid-90s to low 100s. The 16 to 30 day continues to support an active Midwest rain pattern and mild temperatures, with warmer/drier conditions to the south.

In the Plains/Canada, weekend thundershowers favored southern ND, central/southwest OK, West TX, and a few spots in central KS, with isolated lodging damage. Heavy rains persist in central/eastern OK and eastern TX this week from the remnants of a tropical disturbance, but Plains wheat harvest otherwise recovers until the 16 to 30 day when wetness favors the C. Plains.

Spring wheat/canola concerns remain focused on Canada in the long-term due to a warm/dry 16 to 30 day. However, light weekend scattered showers and similar events over the next 2 weeks provide short-term relief.

Europe/FSU Wheat Benefiting From Expanding Rains, But Moisture Shortages Linger. Germany/Poland as well as Ukraine remain in the running for more showers in the next 10 days, aiding wheat. Areas mostly likely to remain short of moisture are north-central France/southeast U.K./northern South Russia/southern Volga.

Models Continue to Conflict on North China Plain Rainfall Return, But Some Relief Likely. Rains continue to keep Northeast corn/soy in good shape. N. China Plain corn/soy has better 6 to 10 day rain chances per the Euro model, but the GFS remains dry. Timely showers are likely to reach at least the southwest half of the belt.

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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