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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1 3/4, soybeans -4, wheat -2, crude oil +.70, dollar +.15, gold +1.0 and the Dow even.
* Grain markets softer overnight coming off the overbought technical situation and weaker Brazilian real. Slow news and market anticipating now weather trends and the USDA report March 31.
* Fed comments this afternoon coming out of their quarterly FOMC meeting should provide guidance on their approach to interest rate moves for 2016.
* In politics, Hillary and the Donald continue to consolidate delegates and President Obama will announce his pick for the Supreme Court this morning.
* Reuters reports a combo cargo of Argentine soymeal and Argentine wheat is scheduled to arrive in Wilmington NC the end of this month. Evidence of the competitive offers coming out of Argentina.
* China’s Dalian exchange had soy, meal and corn lower as trade anticipates Chinese government policy on corn pricing.
* Funds are estimated to have sold 3,000 soybeans, 1,000 corn and 1,000 wheat yesterday.
* Cattle on Feed report will be out Friday afternoon.

Commodity Weather Group Forecast

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In the U.S., showers favored eastern MN, WI, northwest IL, and eastern IA in the past day. Lingering showers occur around the Great Lakes in the next two days, with very spotty activity in the central/far southeast Plains on Thursday/Friday that head to the Gulf Coast to finish the week. Showers scatter into the upper Midwest and from the Delta into the OH Valley at the middle of next week. The Euro guidance is more aggressive with the southern storm track and would also be wetter into the S. Plains/Delta/southwest Midwest, while the GFS is drier than our forecast for these areas. The disagreement has lowered forecast confidence, but relief is still expected to be limited for S. Plains wheat. This will allow stress to build for 40% of the belt (mainly southwest), with a brief warm-up into the low 90s also possible at the middle of the 6 to 10 day. While the Delta is seeing needed drying, the return of showers at the middle of next week and again in the 11 to 15 day will keep early
fieldwork somewhat slow. However, the return of warm weather in the 6 to 15 day across the southern corn belt will encourage early seeding where field conditions permit. Freeze damage threats to wheat remain low through the next two weeks.

In the South America, rain (.25 to 1.25″) favored Mato Grosso in Brazil yesterday. Showers taper off in Brazil for the rest of this week, lingering mainly in Mato Grosso. A new surge of rains push into the south late in the weekend and steadily head north across much of the area by the end of next
week. While this slows soy harvest, most models have trended away from heavy rains, limiting delays and damage potential. The moisture should keep nearly all safrinha corn/sugarcane/coffee
well-supplied with moisture, with the exception of persisting moisture stress for the northeast 20% of
coffee. Argentina rains return this weekend, slowing early harvest. Drier weather next week keeps
harvest interruptions minor.

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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