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Morning Outlook

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Overnight Highlights

·         Greek leaders remain adamant about not giving in to the demands of their creditors, but a poll of citizens of Greece shows that 56.2% would rather accept more austerity and stay in the Eurozone than default and exit. Just 35.4% stand with the position of the leaders.

·         A run on Greek banks Monday saw depositors withdraw an estimated 400 million euros due to fears about an exit.

·         Greek leaders snubbed European please to submit a proposal for averting a default today.

·         The Federal Reserve begins two days of meetings today to discuss monetary policy, with a statement and press conference expected at the end of the grain trading day tomorrow.

·         The dollar is modestly higher this morning ahead of the Fed meeting and amid anxiety over a possible Greek exit from the Eurozone.

·         Corn, soybean and winter wheat condition scores slipped modestly lower in the latest week, while spring wheat ratings improved.

·         A little over a half-million acres of intended corn acres remain unplanted, while 11 million acres of soybeans are still in the bag, including 5.37 million in Kansas, Missouri and eastern Nebraska.

·         Soybeans firmed overnight on the planting delays and loss in crop ratings, with corn and wheat prices bouncing as well.

·         Many of the delayed southwestern Midwest soybean areas are expected to miss the heavier rains until late in the 6- to 10-day period.

·         Heat is expected to focus on the Southeast, with occasional low 90s in the Southern Midwest in the 6- to 15-day period.

·         Rains provide near-term relief to southern and western Canada later this week.

·         Stress is likely to develop with a drier pattern in the North China Plain corn/soybean area.

Commodity Weather Group Forecast

In the Midwest/South, thundershowers scattered across much of the central/southern Midwest and near the Gulf Coast but favored west-central/northern IL, northeast MO, northern IN, and northern/southwest OH in the past day. Scattered showers favor the central/northwest Midwest at mid-week and again Saturday.

However, the wettest weather focuses on southern/east-central MO, southern IL, southern IN, northern KY, and central/southwest OH with the remnants from Tropical Storm Bill Thursday to Saturday. Rains favor the northern/eastern Midwest in the 6 to 10 day and spread across much of the belt in the 11 to 15 day. While scattered showers are possible Thursday/Sunday in recently wet sections of northeast KS, southeast NE, and northern MO, the bulk of the rains avoid the region until late in the 6 to 10 day to offer some opportunities for improvement to delayed soy seeding.

Other than rains in the far north late this week, limited Delta rains aid soft wheat harvest. Hotter/drier concerns remain focused on Southeast corn through the next 2 weeks, with upper 90s to low 100s yesterday.

In the Plains/Canada, showers favored central TX, south-central/northeast OK, and southwest ND in the past day. Heavy rains will threaten lodging damage along the southeast edge of Plains wheat through Thursday from remnants of Bill, but drier weather otherwise aids S. Plains wheat harvest. Rains do return by later in the 6 to 15 day to the C. Plains.

Canada is similar to wetter in the south/west this week, with a few 6 to 10 day showers around the edges of the belt. This will offer short-term relief, particularly to jointing spring wheat. However, drier/warmer trends return in the 11 to 30 day period.

FSU/Europe Showers Keep Moisture Shortages Limited Next 10 Days. Best rains favor Ukraine this week but extend into Russian corn/wheat as well, with shortages mainly in northern South Russia/southern Volga (15% of the belt). Rains ease Germany/Poland moisture shortages further in the next 10 days.

North China Plain Pattern Shifts Drier, Raising Concern for Developing Moisture Stress Later This Month. The Northeast 1/2 of corn/soy has adequate showers in the next 2 weeks. The Euro model backed away from 6 to 10 day rain chances in the N. China Plain, raising dryness problems in dryland areas (15% of the national crop).

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

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