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Morning Outlook

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Overnight Highlights

·        President Obama addressed the nation regarding the Islamic State last night, raising awareness of the terror threat ahead of today’s anniversary of 9-11.

·         The U.S. dollar is hovering near 14-month highs this morning, while global equity and commodity markets came under pressure overnight, with money largely moving to the sideline.

·       USDA will release weekly export sales data at 7:30 a.m. CDT this morning, but traders are primarily anticipating its monthly crop report to be released at 11 a.m. CDT. Trade expectations are summarized below.

·        Frost threat remains similar to Wednesday. Many areas of the northwestern Midwest may see frost, but not many are expected to have a damaging freeze, but it will be a close call.

·        Limited rains should provide good opportunities for harvest advancement over the next two weeks.

·      December corn traded a tight range just above this week’s contract lows ahead of this morning’s USDA crop report.

·       November soybeans traded to a new contract low of $9.8625 over night on big crop expectations, before firming off those lows over the past couple of hours.

·       Wheat dropped to new lows overnight on expectations that USDA will raise global supplies in its report this morning.

U.S. Yields & Production

2014-15

2014-15

 

Corn

Soybeans

Corn

Soybeans

 

Yield in bushels per acre

Production in billions of bushels

USDA September 11

    Pre-Report Estimates

       

Average Trade Estimate

170.743

46.293

14.288

3.883

Highest Trade Estimate

174.100

48.000

14.649

4.035

Lowest Trade Estimate

168.500

45.400

14.000

3.760

Previous USDA Estimate

167.400

45.400

14.032

3.816

         

Water Street Solutions

172.700

48.000

14.475

4.035

 

U.S. Ending Stocks

2014-15

        – new crop

Wheat

Corn

Soybeans

 

billions of bushels

USDA September Report

    Pre-Report Estimates

     

Average Trade Estimate

0.667

2.012

0.453

Highest Trade Estimate

0.716

2.421

0.495

Lowest Trade Estimate

0.625

1.811

0.353

Previous USDA Estimate

0.663

1.808

0.430

       

Water Street Solutions

0.651

2.001

0.495

Commodity Weather Group Forecast

In the U.S., thundershowers in the past day favored southeast MO, central/southern IL, IN, northern OH, southern MI, north-central/western KY, western TN, and far northern AR in the past day. Rain totals of locally up to 5” were noted, with the heaviest amounts in southeast IL, central/northeast IN, northwest OH, far southeast MO, and near the KY/IN border.

Light showers will scatter across the upper Midwest into Friday and again late Sunday/Monday, with intermittent showers otherwise favoring the southwest corner of the Midwest next week. The most widespread showers will occur in the 11 to 15 day, favoring the northern/eastern Midwest. However, none of the activity in the next 2 weeks appears particularly heavy, and recent wet spots in parts of IN, IL, northern MO, and southern IA will ease during the rest of this month.

Delta showers will diminish after the next 2 days, with the Southeast seeing a needed break in wet sections of NC next week. Overall, harvest interruptions and wetness concerns for maturing corn/soy should be minor, with only a slight upturn in showers in the 16 to 30 day for the Delta/Southeast.

Cold air in the next 2 nights is still expected to bring some frost (mainly southeast MN and parts of far northern IA on Saturday morning), but freeze damage risks remain very low.

Drier weather in the next 2 weeks across the spring wheat areas will aid spring wheat/canola harvest, particularly as warmer temperatures arrive in the 6 to 15 day. Recent snow in west-central Alberta will melt too quickly for notable quality or damage concerns, and frost being noted in the western Canadian Prairies is occurring very close to normal first frost dates for the region.

Australia Wheat May See Dryness Redevelop in Parts of Eastern Belt. Showers aid early jointing wheat in the southeast over the next week. Frost in that area could lead to burn back but only isolated damage. Western areas do not have another rain chance until late in the 6 to 10 day,  which is needed since moisture is limited. Dryness is most likely in the northeast 15% of the belt, as moisture is lacking for early heading.

Morning Market Snapshot

 

All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

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Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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