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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +2, soybeans -.09, wheat +.02-03, crude oil -.67, dollar +.45, gold +19.2 and the Dow -72.

·         Grains mixed in the overnight primarily driven by continued rains falling in the Eastern corn belt, and a more benign forecast run in the 6-10 day forecast.

·         Funds remain the large long, with all eyes on technicals to see if they turn back lower causing profit taking liquidation.

·         Argentina’s Rosario Grain Exchange lowered their estimate for the Argentine 15/16 soybean crop from 55mmt to 53.5 mmt.

·         The EIA reported weekly ethanol production at a record 1.01 million barrels yesterday, up 7k barrels a day from last week. Stocks rose to 21.8 million barrels, up 957k barrels from the previous week.

·         On Wednesday, funds sold 11.5k corn, 8k soybeans, 5k wheat, 2k meal, and 3.5k oil.

Commodity Weather Group Forecast

In North America, thundershowers favored parts of central/southeast KS, central parts of the TX Panhandle, northwest TN, southern/western AL, western KY, central NC, west-central OH, southern IN, northeast MT, northwest Alberta, and southern Saskatchewan in the past day. Mid to upper 90s were noted in southwest IL, far southern IA, and MO, with low 100s in northwest MO, KS, and far southern NE. A few thundershowers occur today in the far eastern Midwest, with a narrow band of patchy activity also possible in the far southern/western belt to finish the week. Next week’s rain has been scaled back in the eastern Midwest due to a cooler shift that pushes the storm track farther south late in the week. Thundershowers still scatter into the central/northwest Midwest on Monday/Tuesday and favor the southwest by Wednesday/Thursday, with 11 to 15 day showers also favoring the southern/western corn belt. This would leave areas around the Great Lakes at most risk for building rain deficits in the next two weeks in addition to parts of the western Delta. Temperatures will be similar in the southwest Midwest today and Sunday/Monday, with highs mostly in the 80s to low 90s for the corn belt in the 6 to 15 day. The 16 to 30 day outlook has not shifted much, with the most persistent heat west of the corn belt but a warmer than normal regime. Driest conditions continue to be projected in the northeast 1/2 of the corn belt, with occasional showers in the south/west.

 

In South America, Brazil corn/sugar areas see showers develop across the south half of the corn/ sugar belt next week, slowing early harvest progress which has been favorable this week. Showers become light and limited to the far south in the 11 to 15 day. Argentine corn/soy harvest is favored by mainly dry weather for next two weeks. Showers in the 11 to 15 day still have limited support, with the best chance to ease dryness in the northeast 1/4 of the wheat in the 16 to 30 day.

 

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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