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Morning Outlook

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Overnight Highlights

·         Greece and its creditors remain in a high-stakes standoff, each waiting for the other side to blink first.

·         The dollar has been up more than 1,000 points at its highest level since April 27 in overnight trade, putting pressure on the broader commodity sector, as traders anticipate a U.S. rate hike and fear Greek contagion.

·         Traders in the Chicago area awoke to warm humid greenhouse conditions this morning that are perceived to be positive for corn/soybean yields.

·         The Midwest is expected to dry the first half of this week after a system crosses central and eastern areas today, with the northwestern belt most favored to remain wet over the next two weeks.

·         Heavy rains ease next week in the Southern Plains, but may return in the 16- to 30-day period.

·         Forecast models are not as wet for southern Russia the next 10 days, raising dryness risks once again, although Ukraine is expected to pick up some rain.

·         December corn is challenging support along the bottom of its bear flag formation on the charts as strength wanes in the wheat market this morning.

·         Soybean prices are challenging Friday’s lows after attempting to rally overnight in a corrective bounce.

·         Wheat prices are struggling under the weight of a strong dollar.

Commodity Weather Group Forecast

In the Midwest/Delta, scattered thundershowers in the central/western Midwest and Delta during the latter 1/2 of the holiday weekend favored mainly WI, northwest IL, eastern/southwest IA, northeast SD, KS, northern/western MO, central TN, west-central KY, MS, and LA.

Scattered showers with the current system will cross the central/eastern Midwest and exit the Delta in the next day, with additional rains increasing in much of the Midwest/western Delta late Thursday into the weekend. The rains will slow fieldwork and could be locally heavy late in the week for mainly IA/WI, but a break then aids late seeding until rains return to the northwest Midwest later next week into the 11 to 15 day.

While flooding risks remain localized, this will leave these areas most prone to late seeding delays. Recently wet sections of LA/AR see a break in the 6 to 15 day to ease concerns for late seeding and soft wheat quality, but a return of broad Midwest/Delta rain is expected in the 16 to 30 day and may be heaviest in the Delta. Near to above normal temperatures through much of the next 2 weeks will aid early growth.

In the Plains, weekend rains were heaviest in central/eastern KS, OK, and TX, adding to flooding issues in TX/OK. Additional rains occur Wednesday into Saturday, with locally heavy amounts again possible in TX/OK. Rains do then diminish in the S. Plains for the rest of the 15-day period, with the best chance in NE/KS in the 11 to 15 day. However, 16 to 30 day guidance suggests quality/flooding concerns may return to TX/OK.

Spring wheat showers scattered across the N. Plains but will be limited this week. Showers increase in the 6 to 10 day, including some welcome moisture in southern/western Canada. However, moisture supplies may again be drawn down in the 16 to 30 day, as rains shift back to the south.

Showers Through the Next 10 Days Still Favor Eastern Ukraine and Far SW Russia. Euro guidance is slightly wetter for South Russia in the 6 to 10 day compared to the GFS, but central/eastern parts of the region (particularly the Volga) likely remain dry and will see increasing dryness concerns for heading wheat.

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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