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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1, soybeans +1-3, wheat mixed, crude oil -.64, dollar -.15, gold +9.0 and the Dow -35.
  • Grains higher overnight catching their breath after yesterday’s break. Showers in corn-belt to slow planting progress over next two weeks. Both USDA and Brazil will have monthly crop reports out next Tuesday.
  • Gulf soybean values sharply lower the last few days. China not in the market right now on depressed crush margins and rumors of a June release if Chinese government reserves.
  • AgRural lowered their estimated Brazil second crop corn estimate to 48.9 mln mt vs their previous estimate of 54.6 mln.
  • Estimates of Argentina’s soy harvest progress at 41% complete vs 24% last week and 62% last year.
  • France’s corn planting progress is estimated at 44% complete which lags last year’s for the same period of 80%.

Commodity Weather Group Forecast

 

 

In the U.S., drizzle occurred in the far eastern corn belt, but rains were mainly focused on northern/eastern NC. Widely scattered weekend showers will occur in the Midwest, but many areas will avoid significant rain until widespread coverage arrives from late Sunday through Wednesday (mostly 1 to 2”). While by no means a dry finish to the week, showers for the balance of the 6 to 10 day are more limited on today’s forecast and tend to be heaviest in the northern Delta/far southern Midwest. This may allow for a little better chance for some planting progress late next week in the central/northern Midwest before more extensive 11 to 15 day rains return. These showers are likely to favor the western/far southern Midwest and Delta. Flooding threats are low, but the wet weather will cause planting delays (particularly NE/IA/southern MN/southeast SD/MO and along and south of the OH River). The southwest Midwest remains wetter than normal in the 16 to 30 day, with mostly

normal rain in the balance of the Midwest/Delta. Plains winter wheat yields will remain favorable, with the broadest rains in the 6 to 10 day. While hot/dry currently, Canadian spring wheat areas have a better chance for needed rain early next week, particularly in the eastern 1/2 of the belt. Pacific Northwest wheat still has some dryness in central WA but has improved.

 

In South America, Argentina showers (.25 to .75”) scattered across the corn/soy belt yesterday. Light showers linger in the south 1/3 of the belt this weekend. Shower potential is minimal next week, with the next rain event likely to again scatter showers across the belt at the end of the 6 to 10 day. Harvest delays should be limited, as drier weather returns in the 11 to 15 day. Brazil was mostly dry yesterday. Showers increase in the southwest 1/3 of the corn belt this weekend through early next week. Flooding is possible, with up to 6”. The northeast 1/3 of safrinha corn remains dry, with stress shaving off yield.

 

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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