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Morning Outlook



Overnight Highlights

·       The Federal Reserve begins two days of meetings on its monetary policy, with global investors expecting tomorrow’s statement to include wording supporting a rise in interest rates over the next six months.

·         Equity markets are also under pressure ahead of the Scottish independence vote.

·         Grain and oilseed prices firmed this morning when a USDA-FSA data release of certified acreage suggested that this year’s corn acreage could fall by 3-4 million and soybeans 2 to 3 million.

·        The FSA data will be debated, as at least some of the drop in certified acreage could also reflect a decline in participation. There has been a trend in that direction in recent years.

·       FSA will be updating its data again on October 15, but this debate will continue right into January.

·       Meanwhile, USDA’s track record in big crop years and reported harvest reports both suggest a significant increase in corn and soybean yield estimates on October 10.

·         Thus far, traders are also somewhat skeptical of this morning’s data release, with prices already backing away from the initial rally on the data’s release.

·         Corn and soybean ratings were unchanged on Monday afternoon. That lowered the corn yield model 0.1 bushel, while raising the soybean yield 0.1 bushel per acre.

·       The main Midwest rains for the rest of the month should occur this weekend, favoring the southwestern and central belt.

·        Low- to mid-30s were seen again this morning along the Iowa/Minnesota border into southwestern Wisconsin, but damage risks are low from this point through the remainder of the month.

Commodity Weather Group Forecast

In the U.S., scattered thundershowers (locally 1.25” to 2”) were limited yesterday but were more than anticipated for far southeast IA, far northeast MO, central IL, and central IN. Heavier scattered thundershowers (locally 2.5 to 5.5”) were also noted in central AL, southeast GA, and far eastern SC.

Remnants of a Pacific hurricane are still expected to be pulled out of the Plains this weekend along a front, bringing the main opportunity for Midwest rain during the balance of the month. While this could include some locally 2 to 5” totals from KS and MO into the southern Great Lakes, the otherwise limited rain and warming pattern will aid maturing corn/soy and early harvest.

While not as cold as weekend temperatures, low to mid 30s this morning from the MN/IA border into southwest WI may lead to some very light frost, but freeze risks remain minimal into early October for the Midwest.

A few weekend showers may scatter into the Delta, but rains in the Deep South will otherwise be mainly near the coast in the next 2 weeks. The Carolinas and GA are most in need of a break. The 16 to 30 day shifted drier in the OH Valley and shows the best chance for minor harvest interruptions in the northwest Midwest and Deep South.

Warmer/drier weather through most of the next 2 weeks will aid spring wheat/canola harvest in the Northern Plains/Canada. Significant rain Thursday into early Saturday will aid moisture for newly seeded winter wheat in the southern/eastern Plains, with planting progress picking up in the 6 to 15 day. The rains (mostly .50 to 2”) will threaten minor quality concerns for open boll cotton in West TX but will also be short-lived, with welcome drying next week.

Morning Market Snapshot


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