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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +2, soybeans +6 1/2, wheat +4, crude oil +.57, dollar -1.06, gold +40.0 and the Dow +60.
* Grains supported overnight on the sharply lower US dollar and higher energy markets overnight.
* China’s Dalian exchange is mixed on corn and soybeans, higher on soy meal.
* Weekly export sales report will be out this morning.
* Tomorrow’s monthly Cattle on Feed report tomorrow afternoon. Trade estimates: On Feed 100.5%, Placements 108.3%, Marketings 104.7%.
* Yesterday funds bought 3,000 soybeans, sold 1,000 corn and 4,000 wheat.

Commodity Weather Group Forecast

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In the U.S., showers were limited to the upper Great Lakes in the past day. Rains occur in the Deep South into Saturday, with very light showers near the OH River early in the weekend. However, notable rain holds off until late next week, when heavier rain could return to the Delta/OH Valley. This will again hinder early fieldwork attempts in the southern corn belt and could threaten localized flooding in the Delta. An active pattern continues for these same areas in the 11 to 15 day, although
rain totals are not quite as heavy at that time on today’s forecast. A few light showers will scatter across the central/southeast Plains in the next two days, including snow in the foothills of the central Rockies. This will protect wheat in northwest KS/northeast CO from any cold air damage this weekend, while other areas will not be cold enough over the next two weeks to be at risk despite another cool push in the 11 to 15 day. Showers are otherwise limited to northern/eastern edges of the hard red winter wheat belt in the next two weeks, allowing 40% of the belt to see building stress (central/southwest KS, southeast CO, western TX, western OK). The Euro remains wetter in the 6 to 10 day for TX/OK but is still not the favored solution.

In the South America, rain (.25 to .75″, locally 2.5″) favored southeast Mato Grosso, southwest Goias, and southeast Minas Gerais in Brazil yesterday. Showers are isolated in Brazil until Sunday, when a new surge of rain pushes into the south. Showers steadily expand north across much of the safrinha corn next week, with most areas likely to get needed moisture. Soy harvest delays are limited, as heavy rains are isolated. The showers benefit late sugar development and are likely to finally reach drier Robusta coffee later next week to ease stress. Argentina rains slow early harvest late today and tomorrow, ending in the north on Saturday. Mostly dry conditions all of next week still keep 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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