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Morning Outlook



Overnight Highlights

·      The U.S. dollar rose to four-year highs following the Fed’s new policy statement, both yesterday and overnight, before pulling back in profit taking.

·       The Federal Reserve hinted that it would be a while before it begins raising interest rates, but that the rate of increase could be more rapid than previously expected once it does start.

·        Scotland is voting on whether it wants independence from Britain today, with implications for the dollar as well. A vote to separate would be seen as bearish for the euro and bullish for the dollar.

·       Harvest continues to advance northward, with yields frequently shattering records.

·         Forecast models are wetter for late next week into the end of the month, but concerns are still limited.

·         Wet weather into next week is expected to aid Southern Plains winter wheat.

·         Significant rains are expected in the dry FSU winter wheat belt next week, aiding planting and early growth.

·         Soybeans are still finding modest strength from squeaky tight old-crop supplies as harvest lags, but rallies are also being sold, limiting gains.

Commodity Weather Group Forecast

In the U.S., thundershowers mainly focused on eastern KS, southwest MO, far northern AR, and central parts of the TX Panhandle in the past day. A frontal passage from late Friday into the weekend will bring scattered showers from the southwest Midwest into the Great Lakes, but showers are otherwise very limited in the Midwest until at least next Thursday.

Showers pick up late next week and again in the 11 to 15 day for the western Midwest but will be a limited concern for maturing corn/soy and early harvest after the current dry break. Freeze threats remain minimal into early October on the latest guidance, allowing most fields to reach maturity.

Rains are more limited in the Delta next week, and the Southeast also sees a needed downturn in activity in the next 10 days for wet spots in GA and the Carolinas. Rains return to the Southeast in the 11 to 15 day though, and MN as well as spots from the Gulf Coast into the Southeast appear wettest in the 16 to 30 day. However, the bulk of the Delta and southern/eastern Midwest see favorable harvest conditions.

Showers in the 6 to 15 day should only briefly slow spring wheat/canola harvest in the northeast Plains and northern/eastern Canadian Prairies. An active pattern into at least the first 1/2 of next week aids newly seeded Plains wheat, but areas of excess rain (locally 6”+) appear likely for West TX cotton. More limited showers at the end of the month and into early October should aid wheat seeding. However, cotton quality will suffer in the meantime, and some outright loss is possible.

Models Trending Significantly Wetter for FSU Wheat Areas Next Week. Shower amounts and coverage are increasing in all models for next week. The timely rains would come in time to allow planting in all areas soon enough to ensure that the crop is established before colder weather settles in.

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.




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