What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading mostly 1 to 2 cents higher, soybeans are mixed in old-crop contracts and 5 to 8 cents higher in new-crop contracts, while wheat futures are mixed. I except a choppy to firmer start to the day session at 8:30 a.m. CT, though bulls may struggle to find sustained corrective buying interest. Cattle and hog futures are expected to open with a mixed tone this morning.
* Weather seen as favorable for crop development. Hot, humid conditions will be seen across the Corn Belt to start the week. Along with those conditions will come storm chances through mid-week. As the storm fronts pass, slightly cooler (seasonal) temps will follow. Traders view the forecast as non-threatening and generally favorable. Even though its was a very wet spring across the central Corn Belt, rains are needed. Corn was rolling amid the hot temps over the weekend, especially on lighter soils, as the shallow-rooted crop is in need of a drink.
The long and short of it: While current conditions are seen as non-threatening, the forecast will be watched closely as the National Weather Service forecast for July 13-17 calls for above-normal temps across much of the Corn Belt.
* Japan to resume U.S. white wheat imports in August. Japan plans to start buying U.S. western white wheat again in August, according to a Reuters story citing unnamed trade sources. One source told Reuters, (Japan) is intending to resume imports as soon as possible, as long as safety can be assured. But next week or the week after that is too difficult scheduling-wise, so they're saying they'd like to resume in August." Previously, Japan has said it is awaiting the conclusion of a U.S. investigation into the matter and wants assurance U.S. shipments will include no GMO material.
The long and short of it: If accurate, this would be a positive for the wheat market, though I still don't think wheat has the strength to lead a price recovery.
* Jobs data sparks increased tapering talk. Last Friday's jobs data signaled the U.S. economy added 195,000 non-farm payrolls in June. Plus, April and May payrolls were increased a combined 70,000 from previous figures. As a result, there's increased speculation the Fed will begin to taper its economic stimulus sooner rather than later, with many market participants expecting such action to start in September. The U.S. dollar shot sharply higher on the news, though it is modestly weaker overnight. Interestingly, the stock market is getting a boost from the increased tapering talk. Previously, talk of the Fed removing its economic crutch has caused the equity market to pull back.
The long and short of it: The apparent shift in investor attitude signals confidence in the U.S. economy has strengthened.
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