Morning Outlook

Overnight Highlights

·        President Obama addressed the nation regarding the Islamic State last night, raising awareness of the terror threat ahead of today’s anniversary of 9-11.

·         The U.S. dollar is hovering near 14-month highs this morning, while global equity and commodity markets came under pressure overnight, with money largely moving to the sideline.

·       USDA will release weekly export sales data at 7:30 a.m. CDT this morning, but traders are primarily anticipating its monthly crop report to be released at 11 a.m. CDT. Trade expectations are summarized below.

·        Frost threat remains similar to Wednesday. Many areas of the northwestern Midwest may see frost, but not many are expected to have a damaging freeze, but it will be a close call.

·        Limited rains should provide good opportunities for harvest advancement over the next two weeks.

·      December corn traded a tight range just above this week’s contract lows ahead of this morning’s USDA crop report.

·       November soybeans traded to a new contract low of $9.8625 over night on big crop expectations, before firming off those lows over the past couple of hours.

·       Wheat dropped to new lows overnight on expectations that USDA will raise global supplies in its report this morning.

Commodity Weather Group Forecast

In the U.S., thundershowers in the past day favored southeast MO, central/southern IL, IN, northern OH, southern MI, north-central/western KY, western TN, and far northern AR in the past day. Rain totals of locally up to 5” were noted, with the heaviest amounts in southeast IL, central/northeast IN, northwest OH, far southeast MO, and near the KY/IN border.

Light showers will scatter across the upper Midwest into Friday and again late Sunday/Monday, with intermittent showers otherwise favoring the southwest corner of the Midwest next week. The most widespread showers will occur in the 11 to 15 day, favoring the northern/eastern Midwest. However, none of the activity in the next 2 weeks appears particularly heavy, and recent wet spots in parts of IN, IL, northern MO, and southern IA will ease during the rest of this month.

Delta showers will diminish after the next 2 days, with the Southeast seeing a needed break in wet sections of NC next week. Overall, harvest interruptions and wetness concerns for maturing corn/soy should be minor, with only a slight upturn in showers in the 16 to 30 day for the Delta/Southeast.

Cold air in the next 2 nights is still expected to bring some frost (mainly southeast MN and parts of far northern IA on Saturday morning), but freeze damage risks remain very low.

Drier weather in the next 2 weeks across the spring wheat areas will aid spring wheat/canola harvest, particularly as warmer temperatures arrive in the 6 to 15 day. Recent snow in west-central Alberta will melt too quickly for notable quality or damage concerns, and frost being noted in the western Canadian Prairies is occurring very close to normal first frost dates for the region.

Australia Wheat May See Dryness Redevelop in Parts of Eastern Belt. Showers aid early jointing wheat in the southeast over the next week. Frost in that area could lead to burn back but only isolated damage. Western areas do not have another rain chance until late in the 6 to 10 day,  which is needed since moisture is limited. Dryness is most likely in the northeast 15% of the belt, as moisture is lacking for early heading.

Morning Market Snapshot

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.

www.waterstreet.org 
or 1-866-249-2528