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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -4, soybeans -4-8, wheat +1, crude oil +.75, dollar -.49, gold -8.0 and the Dow +150.
  • Mixed to lower markets overnight on favorable weather forecasts as the trade is viewing pollination as non-threatening.
  • USDA export sales showed corn, soybeans and wheat sales all within expectations.
  • The “Brexit” vote is underway. Current bets are that “stay” wins.
  • Wednesday funds sold 10,500 corn, bought 7,000 soybeans and were even wheat.
  • EIA reported ethanol production off 51k bbls from the previous week while stocks were 72k lower than the previous week.
  • Cattle on Feed report will be out tomorrow. Trade expectations are for On Feed 102%, Placements 109.2%, Marketings 105%.
  • Gulf values continue to hold firm on export demand.

Commodity Weather Group Forecast

 

In North America, thundershowers favored central/northwest OH, central/northeast IN, north-central IL, east-central IA, southeast MN, far southeast CO, far southwest KS, and the TX/OK Panhandles in the past day. Highs reached in the low to mid 90s in the Delta/far southwest Midwest, with low 100s limited to parts of northwest MO and KS. Heat in the short-term in the corn belt will lead to peak highs in the upper 80s to low 90s for most spots, but similar readings to yesterday return this weekend to the far southwest corn belt. However, severe heat otherwise focuses west of the belt through early July. This will limit stress for early pollinating corn. With showers expanding in the southwest Midwest and Delta in the next 10 days, current crop stress due to heat and recent dryness should ease in parts of northern AR/TN/central and southeast MO/southwest IA/KS/southeast NE. This should narrow the most notably dry areas to parts of east-central SD, central IA, southern/west central IL, and central/southeast MI by the end of the 15-day period (20% of Midwest). The 16 to 30 day outlook continues to show relatively modest Midwest warmth through mid-month and the chance for timely showers to return in the western belt, while driest concerns are in the northeast 1/3 of the Midwest. Late Plains wheat harvest will slow in the 6 to 15 day. Warming/ drying in the N. Plains/Canadian Prairies poses no near-term risk for heading spring wheat.

 

In South America, Brazil corn/sugar areas saw only isolated light showers in the south yesterday.

A dry pattern dominates in the next two weeks, allowing harvest to accelerate. Argentina was dry

yesterday and remains dry through tomorrow. Rains will expand across the northern half of the

wheat belt this weekend into early next week, alleviating dryness. Additional rains later next

week will further enhance wheat growth but lead to increasing delays to corn harvest.

 

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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