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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1, soybeans -3, wheat -1, crude oil even, dollar +.95, gold -12.0 and the Dow +130.
* Weaker markets overnight on slow fundamental news and a neutral USDA report yesterday. Trade will now be focused on spring weather and the March 31 planting intentions report.
* Brazil’s CONAB pegged the 15/16 corn harvest at 83.52 mln mt, up from the previous month but off last year’s harvest by -1.1 mln mt. They upped their 15/16 soy harvest to 101.18 mln mt from 100.9 mln last month; 1.5% higher than last year thanks to 3.6% greater planted acreage.
* Exec from China’s COFCO told the People’s Congress that the govt needs to unleash its corn stockpiles sooner rather than waiting until April as domestic market supplies begin to disappear.
* CME Group will be lowering spec margin requirements this week on corn, soybeans and wheat futures contracts.
* Export sales will be out this morning.

Commodity Weather Group Forecast

In South America, thundershowers scattered across much of southern/western Brazil in the past day, favoring parts of central Mato Grosso, Goias, Tocantins, northwest/far southeast Sao Paulo, central/southern Mato Grosso do Sul, southwest Parana, Santa Catarina, and northern Rio Grande do Sul. The recent rains have scaled back dry safrinha corn areas to 10% of the belt, primarily near the Mato Grosso/MGDS border and in minor growing areas of the Northeast. This also includes

about 20% of the coffee belt (mainly Robusta). Showers again diminish in recently wet sections of Parana and adjacent areas over the next two weeks, easing fieldwork and port loading interruptions. Showers also diminish in the Center-West after the weekend, with rains shifting south for late March. The drier last 1/2 of the month will aid any very early sugar harvest. Argentina remains mostly dry until next Thursday/Friday, with rains also at the start of the 11 to 15 day. The current pattern is

allowing wet sections of eastern Cordoba, central/southern Santa Fe, and Entre Rios (1/4 of corn/soy) to drain, but the return of an active pattern from mid-March into early April may cause harvest delays and excess moisture concerns to redevelop.

In the U.S., rain (.50 to 3.5″, locally 9″) fell across the Delta/south-central Midwest yesterday. Moderate to heavy rains continue in the Delta and southern Midwest today, expanding already extensive flooding from AR/LA into western MS/TN. Another shower event this weekend (.25 to 1.5″) will benefit the eastern 1/3 of the Plains wheat but will keep the northern Delta/southern Midwest excessively wet. Shower events in the 6 to 15 day cover much of the Midwest/Delta wheat, but amounts are light to moderate. This will still be enough to hamper draining in waterlogged fields in the Delta and will delay early corn planting. About 30% of ensembles support rains in the southwest Plains in the 6 to 10 day, keeping confidence low.

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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