What Traders are Talking About:
* Rains fall, but amounts somewhat disappointing. Rains fell on areas of the western Corn Belt overnight and are moving into the eastern Belt this morning. So far, rainfall totals have generally been slightly less than hoped, although another wave of rains is forecast to build today and linger into Friday. While most areas of the Corn Belt are in need of rain after a dry spring, key will be how much rain reaches the driest areas of the southern and eastern Corn Belt. Temps will be below to well below normal today and Friday, before they start to warm over the weekend.
The long and short of it: Given soil moisture deficits across the Corn Belt, this rain event is critical despite the early date, especially with hot and dry conditions expected to return once the cold front passes.
* China sells more state-owned beans, but pace slows. China sold 75,788 MT of state-owned soybeans out of 600,217 MT offered for sale this week, according to China National Grain and Oils Information Center. That's down from sales of 188,410 MT last week. This marks the first time in three weeks the sales pace has slowed compared to the previous week.
The long and short of it: With prices for state-owned reserves remaining well below market prices, crushers are likely to continue buying some beans at these now-weekly auctions. But quality of the state-owned reserves remains a concern for some crushers, which means imports won't be completely shut off.
* Euro-zone watch continues. Euro-zone inflation dropped to a 15-month low of 2.4% in May -- down from 2.6% in April. While the inflation data came in lower than expected, it's still slightly above the European Central Bank's (ECB) mid-term target of around 2%. The ECB meets next week on interest rates and is widely expected to leave monetary policy unchanged, although there's a mildly growing number of economists who believe the ECB will cut interest rates sometime this year. Meanwhile, the European Commission seemingly contradicted a document it released Wednesday by saying there is no possibility for euro-zone banks to be directly recapitalized using the currently structured European Stability Mechanism bailout fund.
The long and short of it: In terms of news, it's relatively quiet on the euro-zone front today, which is allowing the euro to ease from recent losses and the U.S. dollar to back off recent gains. But investors fear more pressure ahead for the euro as the eye of the financial storm has yet to hit.
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