What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading steady to 1 cent higher, soybeans are 11 to 13 cents lower and wheat futures are 1 to 3 cents lower. Given the overnight pressure on soybeans and corn's inability to find sustained buying interest -- even corrective buying -- bears are likely to hold the upper hand in the grain and soy complex this morning. Cattle and hog futures are expected to open slightly higher this morning.
* Corn remains an anchor. The corn market had a very poor day Tuesday, negating Monday's bullish reversal and more than wiping out the corrective gains posted to start the week. The poor finish in the corn market pulled soybeans well off session highs into the close yesterday. As a result, soybeans slipped to double-digit losses in overnight trade. It appears the soybean market has exhausted itself trying to pull the corn market higher, much as the wheat market did earlier this month. Until the corn market finds a bottom, it will be hard for soybeans to generate sustained buying interest.
The long and short of it: The corn market is still searching for a low and will be an anchor until demand perks up and signals prices have fallen far enough.
* Forecast trending warmer, drier. The string of below-normal temps across the Corn Belt appears like it will come to an end next week. The National Weather Service (NWS) forecast for Aug. 19-23 calls for above-normal temps over northern areas of the region while southern locations are forecast to see normal temps. As temps warm, rains are forecast to remain scant, with below-normal rainfall forecast for the western Corn Belt and normal precip likely across the eastern Belt during the period. The NWS 8- to 14-day forecast for Aug. 21-27 calls for much the same conditions.
The long and short of it: Warmer and continued dry conditions would be a worst-case scenario for developing crops, especially soybeans. The late-maturing corn and bean crops would benefit most from warm and wet weather.
* Euro-zone pulls out of recession. The longest period of recession in the euro-zone's 14-plus year existence is over. According to the European Union's statistics office Eurostat, the euro-zone grew 0.3% in the second quarter. Germany and France, the bloc's two biggest economies, led the economic recovery. But there are still other countries within the bloc that are still in recession. Economists are hopeful for modest growth moving forward, though they warn of a likely bumpy road.
The long and short of it: Improving macro-economics should be price-supportive for commodities as a whole as that would strengthen investor risk appetite.
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