Weather Turning Price-Negative

June 17, 2013 01:04 AM

What Traders are Talking About:

Overnight highlights: As of 6:00 a.m. CT, corn futures are 3 to 6 cents lower except the July contract which is 1 cent higher, soybeans are 3 to 9 cents lower and wheat futures are mostly 1 to 3 cents lower. Though selling has eased from earlier overnight, grains are expected to open the day session under pressure. Cattle futures are expected to open mixed, while lean hog futures are called steady to weaker.


* Favorable forecast pressures corn, beans. Forecasts call for warm and mostly sunny conditions through mid-week, which should give planted crops a boost and allow producers to progress on late planting efforts. A more active weather pattern is expected the second half of the week, which could bring rains to some areas of the Corn Belt. The computer-generated National Weather Service forecast for June 22-26 calls for above-normal temps and above-normal precip for most of the Corn Belt.

The long and short of it: Weather is price-negative to start the week, but traders will keep a close watch on the wetter forecast for late this week and next week.

* USDA: Oregon GMO wheat find 'single isolated incident.' USDA updated its investigation into the GMO wheat discovery in Oregon, saying the situation appears to be a "single isolated incident." The investigation into the situation is ongoing, but USDA does not anticipate finding GMO wheat in the commercial supply. USDA also said it has provided trading partners with a test to detect GMO presence in shipments.

The long and short of it: The approved test kit for our trading partners and USDA's statement that this appears to be an isolated event are a step in the right direction, but not enough to ease all concerns.

* Macro focus on Fed. While grain traders are mostly focused on weather and crop conditions, the broader investment world will be fixated with the Fed this week as it conducts its two-day Federal Open Market Committee meeting Tuesday and Wednesday. Chairman Ben Bernanke will hold his quarterly press conference after the FOMC meeting. As a result, investors expect a clearer indication of when the Fed will begin to taper its economic stimulus.

The long and short of it: Wording of the post-meeting Fed statement and Bernanke's comments at his press conference will set the price tone in the financial markets and the dollar this week.


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