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Morning Outlook



Overnight Highlights

·         Global stock markets continued to slide overnight on rising concerns that equity markets are over-valued relative to problems plaguing the world economy.

·         The dollar consolidated just above Wednesday’s lows overnight, with crude oil consolidating just below Wednesday’s new 2015 highs.

·         Crop scouts on the second day of the Plains wheat tour pegged the average yield at 34.5 bushels per acre, up from 30.8 bushels the previous year, but below the five-year average for Day Two of 36.98 bpa. The tour will complete its inspection of fields today.

·         Rains, some locally heavy, will continue to favor central and southeastern areas of the Plains into Monday and western areas of the Midwest into Tuesday.

·         The pattern turns drier for the 6- to 10-day period to allow for some fieldwork, before rains return again with broader coverage in the 11- to 15-day period.

·         The best planting progress is expected in the eastern Ohio Valley and Delta through early next week.

·         Traders are beginning to look ahead to next Tuesday’s USDA crop report, containing the first supply and demand balance sheets for the 2015-16 marketing year.

·         The trade expects USDA to increase Argentine corn and soybean production estimates, while Brazilian corn production estimates rise as well.

·         The trade expects U.S. soybean and wheat stocks to rise in the new marketing year, while corn supplies slip slightly lower.

Commodity Weather Group Forecast

In the U.S., thundershowers occurred in the far western Midwest and northern/eastern Plains in the past day, but favored areas were in the central Dakotas, west-central IA, east-central/southeast NE, north-central KS, northeast CO, central/southeast OK, and north-central TX. Locally up to 9” was noted in southeast NE and central OK with the heaviest storms, causing localized flooding issues.

Rains will continue to scatter into the Plains/Midwest until Monday in the Plains and Tuesday in the Midwest, favoring the central/southeast Plains and western Midwest. Less activity occurs in the 6 to 10 day period (particularly around the middle of next week), with broader coverage returning by the 11 to 15 day. The rains will slow seeding progress, but progress should occur during the breaks. The best progress will be in the eastern OH Valley and Delta through early next week.

The Plains rainfall will continue to recharge soil moisture for heading wheat, although pockets of excess moisture may continue Spring wheat areas saw seeding interruptions yesterday, but any rains will be limited for most areas over the next 2 weeks to aid fieldwork. 16 to 30 day rains remain most likely to favor the S. Plains and Delta.

In South America, rain in Brazil (.25 to 1.5”, locally 3”) favored the northern 3/4 of coffee yesterday. Rains linger in the northern 1/2 of coffee in the next 2 days, aiding filling. A new surge of rains develops in southern corn areas late in the weekend and spreads across corn/coffee areas early next week, enhancing corn yields and stabilizing coffee. Showers will slow sugar harvest early next week, but drier weather then develops.

Argentina remains dry through the weekend, with only very limited showers until the 11 to 15 day to allow corn/soy harvest more time to make progress.

China Wheat Heading Benefits From Rain Late in Weekend; Corn/Soy Germination Aided. The showers in the 1 to 5 day may slow corn/soy seeding, but a drier 6 to 15 day will ensure good progress. Good moisture supplies will allow full stands to be achieved. Rains ensure heading wheat will achieve above trend yields.

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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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

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