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Morning Outlook

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Overnight Highlights

·         Greece’s next payment of nearly 1.6 billion euros is due to the International Monetary Fund on June 5.

·         Greece needs assistance from its creditors to make the payment, but German and French leaders say that the two sides have made little progress in recent days.

·         Analysts say that Greece could stretch the process as long as July 20.

·         The dollar dipped early in the overnight session, but has now rallied to new one-month highs once again.

·         Crude oil rallied overnight, but is now well off those highs as the dollar rallies.

·         USDA reports that 92% of the U.S. corn crop was planted as of Sunday, above the five-year average of 88%.

·         The crop rates a condition index score of 383, above the 10-year average first rating of the season of 374.

·         Soybean planting was pegged at 61% as of Sunday, up from the five-year average for the week of 55%.

·         Both corn and winter wheat condition scores came in above trade expectations.

·         Spring wheat planting reached 96% by May 24, above the typical pace of 79%.

·         Wheat prices continued their sell-off overnight, dragging corn prices lower on chart selling as well.

·         Both Chicago and Kansas City July wheat are probing below trend line support off May lows, while December corn is breaking below a triple bottom at $3.72.

·         Soybean prices are bouncing on Argentine strike concerns that appear to be sending demand for soymeal & soyoil to U.S. shores.

·         The Midwest outlook is slightly wetter this weekend, with a break in southern and eastern areas next week.

·         The Southern Plains finally dry out next week, but a wet pattern may return by mid-June.

Commodity Weather Group Forecast

In the Midwest/Delta, thundershowers favored southern MO, northern/west-central IL, central/northeast IA, southeast MN, southern/western WI, southwest MI, central/southwest OH, southeast IN, and central KY in the past day.

A few showers linger in the OH Valley/Delate today, but the best near-term showers return later tomorrow to the far northwest Midwest and spread across the Midwest/Delta through the weekend. Rains also return to the northwest Midwest by the middle of next week, but the rest of the region sees a downturn next week. Showers increase slightly in the 11 to 15 day but still favor the northwest Midwest, and late soy seeding will be most frequently interrupted in NE, IA, SD, and WI over the next 2 weeks.

Elsewhere, crop conditions will be stable, and the drier trends in the Delta next week will help to ease recent wetness in AR/LA. The 16 to 30 day is still expected to trend back to a wetter pattern in much of the region to aid crop growth, but Delta soft wheat could also see quality concerns return.

In the Plains, rains favored central/eastern TX, a few spots in central/northeast OK, and central MT in the past day. Showers scatter across much of the S. Plains winter wheat again in the balance of the week, adding to flooding issues in TX/OK. A break still occurs for most of the 6 to 15 day, although rains may begin to expand again by late in the 11 to 15 day for the central/southwest Plains. The 16 to 30 day still appears wet, allowing quality and flooding issues to return to the S. Plains.

While models are still not in the best of agreement, 6 to 15 day showers should offer at least some temporary relief to dry spring wheat areas in western Canada. Rain chances are more clear in the N. Plains, keeping crop conditions stable.

FSU Showers Expand Into Early Next Week, But Up to 1/4 of Russian Wheat Remains Mainly Dry. Guidance was slightly wetter this weekend into early next week across eastern Ukraine/southwest Russia. However, heat and dryness remain a concern for heading wheat in the Volga, with weekend highs peaking in at least the low 90s.

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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