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Morning Outlook

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Overnight Highlights

·         Europe will soon be able to justify freezing Greek assets if that country doesn’t agree to bailout terms, but thus far Prime Minister Tsipras remains obstinate.

·         European finance ministers begin meeting at 8 a.m. CST today to discuss contingency plans in the event of a Greek exit.

·         Wednesday’s statement from the Federal Reserve suggests a go-slow approach to interest rate hikes, pushing the dollar sharply lower to new one-month lows and just above five-month lows overnight.

·         Crude oil prices are higher on the weaker dollar, but the grain and oilseed complex did not participate in the strength, taking back a portion of yesterday’s gains. However, the grains have frequently traded differently in their day session than in the overnight in recent weeks.

·         Chinese stocks are headed for their biggest weekly loss since 2009 on fears that its stock bubble is ready to pop.

·         Barge traffic on the Illinois River has been suspended due to high water and there is talk the Mississippi may be shut down north of St. Louis, impacting basis levels.

·         The heaviest rain band expected to come from the remnants of tropical storm Bill has shifted south to the far southern Midwest and far northern Delta to close out the week.

·         Denitrification is increasingly a concern across a broad area of the Midwest that has received excessive rains in recent weeks, but it’s typically difficult to get the market to sustain price strength on subsequent  yield concerns until traders see proof of a yield hit late in the growing season.

·         Southeastern Plains wetness should end as the remnants of Bill move north and east, opening up wheat harvest progress for the Southern Plains until late in the 10-day period.

·         The Southeast is expected to see heat stress corn pollination over the next 10 days, before temperatures moderate once again.

·         Rains are likely to return to corn/soybean areas of the North China Plain in the 6- to 10-day period.

Commodity Weather Group Forecast

In the Midwest/South, thundershowers favored central OH, east-central IN, central MO, and the AR/MO border in the past day. Highs were again in the upper 90s to low 100s from southeast NC into SC/GA corn areas.

Tropical remnants will focus heaviest rains on northern AR, southern MO, far southern IL, southern IN, far southern OH, KY, and northern TN during the rest of the week, reaching many of the driest spots. Showers will also occur in the eastern/far western Midwest today and expand in the north/east from Saturday through Monday and again in the 6 to 10 day.

Shower potential returns in the southwest Midwest/northern Delta again late next week into the 11 to 15 day but follows only brief interruptions to delayed fieldwork in northern MO/KS/southern NE soy areas in the meantime. While occasional low 90s occur this weekend into the middle of next week in the southern Midwest, the best chances for mid 90s are focused on KS/southern NE and the Delta, while low 100s continue to stress pollinating corn in the Southeast ahead of a slight moderation in the 11 to 15 day. The 16 to 30 day is not as wet in the eastern Midwest but remains mild, with hotter/drier weather still in the Delta/Southeast.

In the Plains/Canada, heavy rains were limited to south-central/eastern OK and north-central/far eastern TX wheat in the past day. Wetter weather returns late next week, but Plains harvest moves along well in the meantime.

Light showers were scattered across western/southeast parts of the Canadian Prairies, with relief likely in the next 5 days for at least 1/2 of the belt. However, drier/warmer weather then returns and may allow stress to rebuild for spring wheat/canola.

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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