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Morning Outlook

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Overnight Highlights

  • Overnight trade is currently corn -3, soybeans -15, Chicago wheat -6, KC wheat -4, MPLS wheat -2, crude -.48, gold -3.2, and the US dollar -.23.

·         Friday’s COT Report showed that managed money continued to add to their longs in corn and beans through last Tuesday, while lifting some of their shorts in wheat.

·         Trade expectations for planting progress this afternoon are corn 85-90% planted, soybeans 50-55% planted.

·         China’s Administration of Customs reported April soybean imports of 7.0 mmt, up 33% from a year ago. Total soybean imports are 23.3 mmt for the year, up 11.4% from a year ago. However, China’s DDG imports slipped in April to 216,301 mt, down 56% from last year.

·         Safras y Mercado analysts on Friday forecast the Brazilian safrinha crop at 52.1 mmt, down from their previous estimate of 56.03 mmt.

·         Late Friday, Argentine port union said their members were set to strike this weekend for 48 hours in support of their demanded wage increases of 32%.

Commodity Weather Group Forecast

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In the U.S., showers occurred in mainly central/far southeast IN, central OH, central KY, western TN, central/southeast NC, and far northern SC early in the weekend and increased mainly near the TX/OK border as well as eastern ND, central/ southeast SD, far northwest IA, west-central KS, and central NE late. Notable weekend rain also occurred from northern MT into southern/eastern Alberta. An active storm track through much of the next two weeks will favor the western Midwest and eastern Plains most frequently. While the activity will often be scattered, the region west of the MS River will be most prone to late seeding interruptions. Showers scatter into the eastern Midwest from Wednesday through the rest of the week, but a break then occurs until the middle of next week to offer more seeding opportunities. The expected showers will help to limit dry spots in the corn belt heading into the early summer. Late seeding Interruptions will also be limited in scope for the Delta, with relatively dry conditions in the next ten days for the Southeast giving way to a potential influx of subtropical rains in the 11 to 15 day. The active storm track will hinder early harvest in the Plains winter wheat belt, although much of the wettest weather will focus east of the main production area. Wet weather will continue to aid late wheat growth in the C. Plains. Rains eased drought in Alberta for now, and additional chances in the next two weeks have improved as well.

 

In South America, Argentina was dry this weekend and remains dry until late in the 6 to 10 day, aiding corn/soy harvest. The rains then benefit wheat establishment. Brazil saw .50 to 2” rains aid corn filling in the southern 1/2 but slow sugar harvest over the weekend. Dry weather this week aids sugar harvest, but a week of rain delays then starts next weekend. Northern safrinha corn harvest will be favorably dry in early June, as showers focus on the southern belt and aid late filling.

 

 

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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