Morning Outlook

Overnight Highlights

• Overnight markets have corn -1, soybeans -3, wheat -1, crude oil even, dollar +.95, gold -12.0 and the Dow +130.
• Grain markets mixed to lower on favorable forecasts for the US and South America.
• Trade anticipating corn planting progress around 75% vs 85% last year and 75% on average. Soybean progress expected around 35% compared to 45% last year and 31% on average.
• COT report showed Managed Money Tuesday was net long corn 42,940 (off -28,063), net long soybeans 201,782 (up 34,228) and net short wheat -78,181 (up -15,940).
• The long fund position in soybeans is now the second largest on record.
• Traders will be watching port workers negotiation progress in Argentina after the one day workers strike.
• NOPA crush out today expected at 147.7 mln bu for April compared to 150.3 a year ago.
• Friday funds sold 7,000 corn, 5,500 soybeans and bought 7,000 wheat.  

Commodity Weather Group Forecast

In the U.S., scattered weekend showers favored central/southwest MI, southwest/far northern OH, central/far northwest IN, central/northeast IL, the MO/IA border, central MO, central/northwest OK, southern/far northern parts of the TX Panhandle, northeast KS, and near the WA/OR border. Damage was limited on Saturday morning, as notably below freezing temperatures were mostly limited to northern SD/eastern ND. However, colder than expected conditions on Sunday morning likely resulted in some losses to emerged corn from central MN into west-central WI (1 to 2% of Midwest) and will lead to acreage shifts to soy. Rains will occur in mainly the southern 1/3 of the Midwest and Delta this week, slowing fieldwork. Showers the n shift to the western Midwest in the 6 to 10 day and the southern/western Midwest and northern Delta in the 11 to 15 day to slow fieldwork, but the limited Midwest rainfall this week will aid seeding progress. Plains winter wheat yield potential will re-main high, with fairly extensive rain events in the next two days and again in the 11 to 15 day. The weekend showers also aided Pacific Northwest wheat heading. Shower potential is also quite good across dry sections of western Canada spring wheat late this week to ease concerns for now, while wheat seeding should near completion in the N. Plains this week.

In South America, Argentina showers (.25 to 1”, locally 2”) favored southern Buenos Aires, southern Cordoba, and northern Entre Rios over the weekend. Showers in the next two weeks remain limited in coverage, keeping harvest delays generally minor. Brazil rains (.25 to 1.25”, locally 2.25”) were confined to the southern and northeast fringes of the corn and sugarcane belts through the weekend. While not heavy, showers are frequent this week, aiding late pollination and filling corn in the south but short-changing the drier northern 1/3 of the belt. Sugar-cane harvest will be notably slowed this week.

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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