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Morning Outlook

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Overnight Highlights

·         Greek Prime Minister Alexis Tsipras stated overnight that he is prepared to take responsibility for telling creditors “no.”

·         Tsipras also stated that the International Monetary Fund “bears criminal responsibility for the situation in the country,” further antagonizing Greece’s relationship with its creditors.

·         The European Central Bank governing council meets today to assess whether to extend additional emergency aid to Greek banks to keep them solvent as depositors rush to withdraw their accounts.

·         The Federal Reserve Open Market Committee continues meetings this morning to discuss potential changes to its monetary policy. It is scheduled to release a statement on its policy at 1 p.m. CDT with Chair Janet Yellen stepping in front of a microphone for a press conference 30 minutes later.

·         Currency traders will be watching for any signs of a change in monetary policy in the Fed’s statement, with potential significant implications for money flow either in or out of the broader commodity sector, including grain and oilseed prices.

·         The dollar is modestly lower ahead of the Fed statement, while crude oil is $1 higher and flirting with a possible test of 2015 highs, supporting money flow into the grain and oilseed sector.

·         The remnants of tropical storm Bill are bringing heavy rains again to Oklahoma and Texas, threatening wheat waiting to be harvested.

·         The remnants are expected to bring heavy rains to much of the central and southern Midwest, increasing flood risks while adding to planting delays.

·         Heaviest rainfall totals are expected in the far southeastern Plains the next two days, and then near the Ohio River on Friday and Saturday.

·         Soybeans surge to new five-week highs overnight on concerns that soybeans may lose acres and productivity due to excessive rains this season.

·         Corn futures saw follow-through buying after a strong technical finish to trade on Tuesday.

·         A plant pathologist at Kansas State stated Tuesday afternoon that Goss’s blight has been identified in both Nebraska and Minnesota and is likely in Kansas as well.

·         Bargain hunters are again stepping up to buy wheat following the recent price break.

·         Heat stress continues over the next 10 days for corn in Georgia and the Carolinas.

·         Rains are expected to ease dryness in Western Australia wheat areas this week.

·         Look for follow-through strength for the grains early today, but price movement later today will be subject to trade reactions to the Fed meeting.

Commodity Weather Group Forecast

In the Midwest/South, thundershowers favored central MO, southern IL, southern IN, west-central OH, and northern KY in the past day. While scattered showers will occur in the Midwest in the next 2 days, the heaviest rain is likely Friday/Saturday along and just north of the OH River from the remnants of Tropical Storm Bill.

Broader rain then tracks across the northern/eastern Midwest this weekend, with a similar track favored for much of the 6 to 10 day. Heavier rains do return to the very delayed soy seeding areas of northern MO/KS/NE at the end of next week and into the 11 to 15 day, but limited activity in the meantime aids fieldwork in that region.

Highs will rise well into the 90s this weekend and early next week in southern NE/KS and possibly low to mid 90s into the southern Midwest at mid-week, but the most notable heat remains focused on the Southeast. Widespread low 100s yesterday added to stress for pollinating corn in GA/Carolinas. The 16 to 30 day remains cool/showery across the Midwest, while warm/drier conditions in the Delta/Southeast may cause expanding stress.

In the Plains/Canada, rains were heaviest in central TX and central/southwest NE yesterday, with a few showers in northern/western Alberta. Rains are expected to aid southern/western Canada spring wheat this week, but more limited rains and warming trends in late June/early July remain a concern for redeveloping stress.

The tropical remnants in the southeast Plains will impact only the edge of the main winter wheat belt with lodging damage in the next 2 days, with drier weather then returning in the S. Plains. Rains may return late next week and into early July but appear heaviest in NE/KS/CO.

FSU Rains Active Next 10 Days; N. France Most Likely Area to Remain Dry in Europe. Showers in Ukraine gradually extend into Russian corn/wheat in the next 10 days, but northern South Russia/southern Volga (15% of the belt) still see the lightest amounts. Rains benefit Germany/Poland but northern France is not favored.

North China Plain Showers Limited in Coverage Next 10 Days; Spotty Moisture Stress Later This Month Northeast China corn/soy remains in good shape, with more rains this week. The N. China Plain may see a few showers in the north this week and the south next week, but dryness likely develops in the heart of the area late this month.

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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