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Morning Outlook

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Overnight Highlights

* Overnight trade has corn +1, soybeans +1, wheat +1, crude -.40, dollar +.02, gold -6.0 and the Dow +15.

* Fund short position supporting markets overnight.

* Weekly export sales report delayed until tomorrow.

* China continues to be in the market for US soybeans but activity shifting to Brazil.

* Argentina peso trading around 13.5:1. Farmer sales has slowed some there.

* Soy meal cash market is trying to firm, up $1-2 yesterday.

* USDA will release Cattle on Feed report Friday afternoon. Average estimates: On Feed 99.0%, Placements 95.6%, Marketings 101.9%.

* Yesterday’s March corn closed above the 50 day moving average for the first time since October.

* Funds reportedly bought 4,000 corn and sold 6,500 soybean and 1,000 wheat.

Commodity Weather Group Forecast

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In South America, showers in Brazil again scattered into central/northeast Mato Grosso, northern Goias, Tocantins, Bahia, northern Minas Gerais, and Espirito Santo in the past day, and little change is likely until next week. Models are then fairly aggressive in spreading rains across the Center-West in the 6 to 10 day but still appear overstated on the intensity of the rain, with amounts of mostly 1 to 2.5″ likely. While guidance is split on the 11 to 15 day pattern, a drier shift is still favored in northern crop areas of Brazil, allowing soy harvest to improve. Rains appear likely to increase in southern Brazil in the 6 to 15 day, aiding currently warmer (90s) and drier sections of Rio Grande do Sul by the middle of next week but slowing early soy harvest in Parana. Rains are helping to ease rain deficits in coffee areas currently, particularly in some of the driest northeast parts of the belt. Argentina picked up showers in southwest/far northeast Buenos Aires and La Pampa in the past day, but the best rain chances arrive on Monday/Tuesday and still are likely to narrow currently hot (mid to upper 90s) and recently drier spots in northeast Cordoba, central Santa Fe, and western Entre Rios. Northeast Buenos Aires and adjacent areas are still most likely to be short-changed and see minor stress on corn/soy (10 to 15% of the belt). CFS guidance remains wetter than normal in southern Brazil and Argentina, with driest conditions across Center-West/Northeast Brazil.

In the U.S., rain/snow (.10 to .60″) favored the Pacific Northwest/eastern Midwest/eastern Delta/C. Plains yesterday. Moderate rains today/tomorrow cross the Delta/Southeast. The next storm in the 11 to 15 day is stronger, with rain/snow in the Plains/Midwest early and late-period rain in the Delta/Southeast. Wetness threats to
wheat increase but are still low, given drying prior to this system. Winterkill threats remain low in the next two weeks, with a milder pattern.

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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