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Morning Outlook

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Overnight Highlights

·         The currency markets traded in both directions overnight, reflecting confusion in the markets.

·         Greek Prime Minister Alexis Tsipras spoke boldly of a deal in the works.

·         However, other European leaders squelched that enthusiasm, saying they lacked any concrete proposal on paper and that another meeting would likely be needed on Thursday, in addition to today’s meeting.

·         Stocks in Europe and the United States are currently surging on hopes and expectations of a Greek deal.

·         The European Union voted to extend sanctions to Russia until at least January of next year. Greece recently met with Russia, but did not try to veto the sanctions bill.

·         Strong storms are moving through southern Minnesota and northern Iowa this morning.

·         Widespread Midwest rains are expected late Wednesday through Friday, but then a milder/drier pattern develops.

·         The storm track is expected to shift south, expanding rains in to the Delta and Southeast in the 6- to 15-day period.

·         Weekend showers were beneficial in the Canadian Prairies, but dryness concerns are expected to rebuild.

·         Warmer and drier trends in France and Italy are expected to threaten corn growth.

·         USDA is scheduled to update its crop ratings at 3 p.m. CDT this afternoon, with the trade expecting that they will confirm above-average ratings for corn and soybeans amid “greenhouse” conditions.

·         Corn prices slid modestly lower overnight on perceptions that current conditions favor high yields for corn as the trade continues to focus on the “rain makes grain” mantra.

·         In reality, we are likely hurting yields in some key production areas, but the trade likely won’t have evidence of that until the end of the season.

·         Soybeans firmed again on positive chart signals amid planting delay concerns threatening acres and yield. A strong start to the weak would be positive for extending gains near-term amid strengthening chart signals.

·         Wheat prices bounced off areas of chart support as harvest gains momentum in the Plains.

Commodity Weather Group Forecast

In the Midwest/South, weekend thundershowers favored eastern/northwest MO, southern IL, southern IN, southern OH, central MN, the Dakotas, central/far western KY, northern MS, and far northeast AR. Mid to upper 90s were mostly limited to KS and the Southeast. The heaviest weekend rain were in central SD/east-central MO/southeast IL/southern IN (4” to locally nearly 7”), with the IL/mid-MS River valleys continuing to run well above flood stage.

Much of the rain will focus on the far north in the next 2 days, but widespread coverage returns from late Wednesday into Friday. Rain totals of 1.5 to 2.5” will occur in many recently wettest sections of MO/IL/IN/OH. However, rain then shifts south and offers welcome 6 to 15 day moisture (but slows wheat harvest) into the Delta/Southeast. This likely eases recent Midwest wetness concerns.

Heat will rebuild in the Delta/Southeast (mid-90s to near 100 F) until late this week and adds to Southeast corn stress but then eases. While the northern Midwest shifted drier in the 16 to 30 day, mild temperatures support good corn/soy prospects.

In the Plains/Canada, showers scattered across central/northwest Alberta, Saskatchewan, far western Manitoba, and near the TX/OK border but favored the Dakotas/central MN. The return of warmer/drier trends in Canada into July remain likely to allow stress to rebuild for spring wheat/canola, with very hot weather also likely in the 6 to 10 day for the Pacific Northwest. However, recent rains will limit threats in the N. Plains for now.

Plains wheat harvest moves along well this week but slows in the 6 to 15 day, particularly in NE/KS/CO. 16 to 30 day rains remain most active in the C. Plains.

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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