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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -1 ½, soybeans +3-6, wheat -1-3, crude oil +.27, dollar +.02, gold -2.0 and the Dow +35.
  • Mixed trade this morning with soybeans supported on the expectation that Argentina’s production problems will lead to more US business. Corn market expecting good corn ratings this afternoon and supportive weather outlook.
  • China’s National Trade Center issued a statement this morning that their planned soybean auction will be postponed – no reason or reschedule date was given.
  • Trade expects corn planting progress to be close to 95% complete – five year average is 94%. Soybean progress is expected to be either side of 70% – five year average is 70%.
  • The Brazil state of Mato Grosso lowered their estimate for 2016 corn production to 21.2 mln mt vs their last month estimate of 23 mln due to the impact of hot/dry weather on the Safrinha corn crop.
  • Friday’s COT report showed Managed Money increased their net long of corn by 15,718 contracts, reduced their net long of soybeans by -2,980 and added to their net short Chicago wheat position by -17,061.
  • Friday funds bought 10,000 corn, 6,000 soybeans and sold 1,000 wheat.

Commodity Weather Group Forecast

 

 

In North America, rains during the holiday weekend favored northeast MT, ND, north-central/southeast SD, southern/ northwest MN, northern/eastern IA, NE, southeast/northern MO, central/western KS, northeast CO, south-central OK, TX, southern/east-central AR, northern/western LA, far northwest MS, east-central/western WI, far southwest IL, central OH, southern/eastern NC, SC, east-central GA, southern Manitoba, southern Saskatchewan, and central/northeast Alberta. Scattered showers linger in the western Midwest today and shift eastward Wednesday/Thursday (favoring central areas), with patchy showers favoring the central/northwest belt from Friday into the weekend. Otherwise, drier weather develops for most of next week, with rains favoring the northern/eastern Midwest in the 11 to 15 day and shifting to the western belt in the 16 to 30 day. The breaks in the rainfall will limit interruptions to late soy seeding, with moisture favorable for now to support early corn/soy growth. Breaks will also occur in the Delta/Southeast next week, following Delta rains in the latter 1/2 of this week (including recently drier sections of the TN Valley). Rains will hinder maturing wheat in TX/OK this week, but drier weather begins to develop in the S. Plains starting this weekend to improve harvest conditions. Weekend rains and additional chances in the next two weeks are continuing to ease dry spots for now in spring wheat areas, particularly across western Canada.

 

In South America, Brazil weekend rains (.50 to 2”) covered the southern 1/2 of corn/sugar. Showers on a nearly daily basis in the next ten days ham-per harvest, with localized flooding a concern for the southern 1/2 of corn and 3/4 of sugar. The northern 1/2 of corn has favorable early harvest weather. Argentina weekend rains (.25 to 1”, locally 4”) benefit the southern 1/2 of wheat, and light showers next weekend aid the northern 1/2. Delays to corn/soy harvest remain minor.

 

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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