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Morning Outlook



Overnight Highlights

·        Euro-zone industrial production exceeded expectations in July & second-quarter payrolls increased, providing a double-dose of good news, but the euro remains weak and the dollar strong this morning as investors remain cautious.

·       The caution comes as Russia mulls retaliation against the latest round of sanctions imposed by Europe and the United States this week.

·       Argentine port workers have scheduled a four-day strike next week over a wage dispute.

·        The Argentine government reports that farmers there are hoarding 790 million bushels of soybeans, or 40% of the crop, due to a falling peso and high inflation in that country.

·        July DDGS exports reached record levels, up 48% over the previous year, but that came before China’s restrictions were implemented, so August numbers are expected to be much lower.

·        Euronext wheat futures traded down to $4.37 per bushel overnight due to a surplus of feed-grade wheat in France, weighing on U.S. prices as well.

·         Corn and soybean futures consolidated following new contract lows on Thursday.

·        Soybean prices firm modestly ahead of tonight’s close call with cold temperatures.

·        Readings dropped into the low- to mid-30s°F in the western Plains as far south as northwest Kansas overnight.

·        This morning’s temperatures have largely verified warmer than those forecast by the American GFS model, which has been the coldest of the models.

·        The cold spreads over much of the northwestern Midwest tomorrow morning, with forecast models calling for readings between 32 and 35°F in scattered areas from southwest Iowa to west-central Wisconsin.

·       Commodity Weather Group believes that a hard freeze (28°F or colder) is unlikely.

·        The balance of the 30-day forecast shows no notable freeze threats.

·        The National Weather Service has posted frost/freeze warnings in the Dakotas, northern Minnesota and parts of Nebraska.

Commodity Weather Group Forecast

In the U.S., showers were limited yesterday but favored southern parts of the TX Panhandle, the TX/OK border, the TN/MS border, southern/eastern NE, and central/southwest IA. Light/scattered showers head through the Great Lakes today/tonight, with a similar system occurring late Sunday/Monday.

Rains will otherwise favor the Gulf Coast into the Southeast through the middle of next week. However, the outlook has trended wetter from next Friday into the weekend, with another frontal passage in the 11 to 15 day. Both events should favor the northern/western Midwest. While a few locally heavier storms are possible, severe wetness concerns remain unlikely given the limited showers in the next weeks.

Frost has remained north of the corn/soy belt this morning. Lows will be in the 30s for the northwest Midwest tonight before moderating, including pockets of frost from central/northeast IA into southeast MN and western WI. A damaging hard freeze (28°F or colder) remains unlikely, and the balance of the 30-day forecast shows no notable freeze threats. Temperatures this morning have largely verified warmer than the colder forecast guidance had suggested.

A tropical influx of moisture may bring some heavier rains to areas in the southern Delta or Southeast by the 11 to 15 day, with the best chance for showers also in the South in the 16 to 30 day. Early conditions for newly seeded winter wheat areas in the Plains remain largely favorable.

Lonely minor spring wheat harvest interruptions are anticipated in the eastern Canadian Prairies and northeast Plains in the 6 to 15 day, and warming temperatures in the 6 to 15 day will help to dry out the wettest fields to improve harvest prospects.

FSU Wheat Likely to See Another Upturn in Rains Late Next Week Allow More Seeding. Showers earlier this week eased dryness in 1/3 of the Russian wheat, but nearly 1/3 of the crop (mainly in S. Russia and the Volga Region) remains dependent on 6 to 15 day rains to avoid late planting and a poorly established crop.

Morning Market Snapshot


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