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Morning Outlook



Overnight Highlights

·         Showers and thunderstorms are moving through the central Midwest this morning.

·         Rains expand across the southern half of the Midwest and Delta the next two days, with a second surge coming Sunday through Tuesday, favoring the Delta and the southeastern two-thirds of the Midwest. The pattern is a bit drier after that.

·         Forecast models remain split on rains for the dry northern third of Brazil’s corn/soybean belt in the 11- to 15-day period, but the 16- to 30-day is leaning somewhat wetter.

·         All Class 1 railroads will be required to submit weekly performance reports due to rail congestions plaguing areas of the Northern Plains and Midwest as the government tries to facilitate movement of grain in the region.

·         The dollar continued to tumble in value against other global currencies overnight, following yesterday afternoon’s release of the minutes of the last Federal Reserve policy meeting showing that concerns about the strong dollar may delay the central bank’s interest rate hikes.

·         Wheat prices set back overnight on fears that recent gains priced us out of the global market.

·         Soybeans garner strength from intensifying dryness in Brazil’s northern belt.

·         Export sales data for the week ending October 2 is scheduled to be released at 7:30 a.m. CDT this morning.

·         Traders continue to position for tomorrow morning’s USDA crop report. Trade expectations for the report are as follows:

U.S. Yields & Production







Yield in bushels per acre

Production in billions of bushels

USDA September 11

    Pre-Report Estimates

Average Trade Estimate





Highest Trade Estimate





Lowest Trade Estimate





Previous USDA Estimate





Water Street Solutions






U.S. Ending Stocks





billions of bushels

USDA October Report

Average Trade Estimate




Highest Trade Estimate




Lowest Trade Estimate




Previous USDA Estimate




Water Street Solutions




Commodity Weather Group Forecast

In the U.S., the main showers yesterday fell in the southwest 1/4 of the Midwest. Rains expand across the southern 1/2 of the Midwest and Delta in the next 2 days, and a second surge of rains then occurs late Sunday through Tuesday and favors the Delta and southeast 2/3 of the Midwest. Greatest risks of flooding should be in MO/AR/S. IL/W. KY/TN, but damage will be very limited.

Cotton quality will suffer in the northern 1/2 of the Delta. NW Midwest harvest remains favorable, with only light showers late in the 6 to 10 day. Rains late in the 11 to 15 day favor the central Midwest and could slow harvest further in MO/IL. Plains rains this week ease dryness for OK/CO, aiding early wheat growth. Southeast harvest concerns are limited.

In South America, spotty Brazil showers were limited to far west-central Mato Grosso and far southern Rio Grande do Sul in the past day, and showers become frequent again in the southern 1/3 of Brazil wheat in the next 15 days to keep quality concerns in place. Guidance remains split on rain potential late in the 11 to 15 day, with our forecast still closer to the drier solutions and only marginally wetter than yesterday.

This would still miss the northern 2/3 of the coffee belt and over 1/3 of corn/soy, but confidence does remain low due to the model disagreement. CFS guidance may be too fast but does lean somewhat wetter today as well for the 16 to 30 day in northern Brazil. Until rains are received, flowering delays will continue for coffee, and corn/soy germination conditions will decline.

Argentine rains favored southeast Cordoba, southern Santa Fe, Enter Rios, and northeast/far southern Buenos Aires overnight (mostly .50 to 1.25”), with a similar event at the middle of next week. This will maintain a few wet pockets in mainly Entre Rios and northeast Buenos Aires (10% corn/20% wheat), with stable conditions elsewhere. Spotty frost tonight in the far southwest will not pose a damage risk at this stage.

Rains to Increase in E. Australia This Weekend, But Showers Likely Still Too Light in South. Showers enhance moisture for filling wheat and early cotton growth in the next 5 days. Victoria/S. Australia could see a few light showers late this weekend but are unlikely to avert stress on heading wheat in about 1/4 of the belt.

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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