What Traders are Talking About:
* Weekend rains generally disappointing. Scattered rains fell across the Corn Belt over the weekend, but amounts and coverage levels were generally lighter than hoped, especially in the driest areas. What rains were received in the dry eastern and southern Corn Belt were just enough to buy crops a little time. But that amount of time is likely to be limited as forecasts call for hot and dry conditions this week. That will quickly use up any precip received over the weekend and further stress the crop.
The long and short of it: Weekend rains weren't enough, especially in the driest areas. As a result, traders are starting to build weather premium into the market.
* Crop condition ratings expected to decline. Traders are expecting corn and soybean crop ratings to decline again in this afternoon's update from USDA. Hot, dry and windy conditions in the eastern and southern Corn Belt last week likely caused further crop deterioration. Conditions are better in the western Corn Belt, but there are still problem areas there. The key to how much crop condition ratings decline is likely Iowa. Western Iowa got beneficial rains last week and farmers in that area say crops really responded to the moisture. But southern and eastern areas of the state remain dry and crop condition ratings likely took another step backwards there.
The long and short of it: How much crop condition ratings decline will help determine how aggressively traders build weather premium into the market this week.
* Euphoria from Greek elections fades. Greece's pro-bailout New Democracy party secured a narrow victory over leftists in Sunday's elections. That initially set off a global market rally overnight, but the euphoria is fading. Greece must still for a government, which appears about 90% likely at this time. But while this would keep Greece from exiting the euro-zone, the country faces many hurdles ahead. Plus, the focus has shifted to Spain and its troublesome debt situation.
The long and short of it: The general investor feeling is that a worst-case scenario has been avoided. The Greek election results buy some time, but there are still a lot of problems in Greece -- and throughout much of the euro-zone.
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