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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -3, soybeans -5, wheat mixed, crude oil +15, dollar +.95, gold -12.0 and the Dow +130.
  • Lower grain trade overnight on better Argentine weather outlook, favorable nearby Midwest weather and a higher US dollar index.
  • Outside markets have crude oil and the US dollar higher and US equity futures lower.
  • Argentine government reported first quarter farm exports were up 68% from a year ago due to policies of the new administration.
  • Brazil analyst Agroconsult lowered their estimate for Brazil second crop corn to 52.5 mln mt vs their previous estimate of 54.6 mln.
  • Informa lowered their Argentine soybean production estimate at 55 mln mt, off -4.5 from their previous guess.
  • Wheat Quality Council tour in KS said scouts canvasing the northern route project 47.2 bpa after 306 samples, compared to 34.3 bpa last year on the same route.
  • July corn will need to find support in the 3.74 area while July soybeans will try hold on to the trendline today if it can close above 10.27 – if not, the market would be due for a setback to the 9.95 area initially. July Chicago wheat will have a support zone below in the 4.50-4.60.

Commodity Weather Group Forecast

 

 

In the U.S., showers were light and scattered across mainly far northeast IA, central/northern IL, WI, far western MI, western IN, and central TX in the past day, with more organized storms aiding moisture in NC, southeast SC, and southern GA. The Midwest showers will track eastward today, with a similar event this weekend. Broader coverage of the Midwest/Delta arrives Monday to Thursday, with occasional rain chances into the 11 to 15 day. This will slow seeding progress after recovery this week, although notable flooding issues are unlikely. Fieldwork will likely be slowest in already wetter spots in the western 1/4 of the corn/soy belt, while some progress occurs in between showers in many other areas. With a risk for a wetter than nor-mal finish to May, SD, NE, KS, MO, and western IA may struggle the most to see fieldwork advance. Showers favor the C. Plains early next week, with additional 11 to 15 day chances. A few spots in the southwest hard red winter wheat belt may miss, but yield potential remains quite good given recent rains. Heading winter wheat in WA/OR will encounter building moisture deficits and increasing irrigation demands due to ongoing limited shower potential and warm temperatures. Spring wheat seeding should encounter limited interruptions, with the main showers in the 6 to 10 day for the northwest Plains.

 

In South America, Argentina’s dryness this week lasts into tomorrow. Showers cross the southern 1/3 of the corn/soy belt on Friday. Additional showers then scatter across the area next week and slow harvest, with the main rains still focused in the southern 1/3. Damage potential is limited, as most showers are light/ intermittent. Brazil was mostly dry yesterday and will remain so until showers increase in the south over the weekend, only extending slightly farther north next week. Localized flooding is possible in Parana, with up to 5” expected. The northeast 1/3 will remain dry, with stress in the next 10 days.

 

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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