Grains are sharply lower in overnight trading:
July Corn – 19 cents/bu (6.54)
Dec Corn – 18 ½ cents/bu (5.54)
July Soybeans -22 ¾ cents/bu (14.25 ¾)
Nov Soybeans -29 cents/bu (13.14 ¼ )
July Chi Wheat – 9 cents/bu (6.53 ¾ )
Cdn $ -0.00450 (81.075 cents)
WTI Crude Oil -0.14/barrel (72.01)
Thursday is shaping up like another “risk off” type of day as commodities and equities alike are under duress this morning. Gold futures are off $72.50/ounce, silver is down 11 ½ cents/ounce, while USA equity markets are down roughly ½ per cent at the time of writing this commentary. Comments yesterday from the Federal Reserve yesterday regarding the potential for interest rate hikes has the US dollar on fire, which is typically negative for commodities traded in US currency.
Later this morning, the USDA will release their Weekly Export Sales data, for the week ending Thursday, June 10th. No major surprises are expected, as shown in the average trade guesses, listed below (in thousands of tonnes):
From a weather perspective, scattered showers and thunderstorms are moving through Iowa and Wisconsin this morning. Temperatures are expected to be record high in many Midwestern locales today before cooling down dramatically, starting tomorrow. Rains are expected to move through the eastern Corn Belt tomorrow, before another system fires up on Sunday/Monday, which will move from the west to the east, providing decent moisture coverage for the Corn Belt. Tough to rally a grain market on drought concerns when it is raining, but ultimately, the market will be paying close attention to precipitation accumulations, particularly in the northern Plains, as a lot of moisture is needed to recharge parched soils. Temperatures are expected to return to normal in the extended 11 to 15 day forecast windows.
The weakness in the Canadian dollar will help offset the sharp drop off in grain futures, in terms of local basis bids for grains. However, the bottom continues to drop out of old crop soybean basis, as domestic crushers continue to fade bids for bean deliveries.