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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1 3/4, soybeans -2, wheat +1, crude oil +35, dollar +.05, gold -2.0 and the Dow +25.
* Mixed markets overnight with corn under pressure from Chinese corn futures and an outlook for better planting conditions past April 6th.
* Chinese Dalian corn price into new lows on Chinese media reports the government will be dropping their stockpiling policy and going to market driven pricing.
* Wheat conditions will be out this afternoon. Trade will be watching for changes in conditions due to the recent cold temps and the ongoing dry conditions.
* Friday’s CFTC report showed Managed Money in Soybeans added 31,908 contracts and are net long 53,682, they covered 33,598 in Corn leaving them still net short -154,569, and added -14,330 shorts in Wheat putting them net short -81,837.
* USDA Quarterly Stocks and Prospective Plantings will be out Thursday.

Commodity Weather Group Forecast

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In the U.S., snow showers lingered in the northwest Midwest early in the weekend and developed in mainly south-central KS, northwest OK, and northern parts of the TX Panhandle late (1 to 3″, locally 6″), with scattered rains also noted in the eastern/ southwest Midwest, southern/eastern Delta, and Southeast. The main system this week favors the N. Plains/northwest Mid-west/South between late Tuesday and Thursday, while the 6 to 10 day trended drier. Showers then scatter across the central/southeast Plains and return to Delta and southern/eastern Midwest in the 11 to 15 day. The rains this week and again in the 11 to 15 day will cause only minor interruptions for southern corn seeding. While the weekend snow in the S. Plains did offer some slight relief to dry wheat areas, precipitation amounts were largely only .10 to .35″, and the return of warming/drier conditions in the first 1/2 of April will likely quickly draw down moisture again for the southwest 40% of the hard red wheat belt that has the most limited moisture reserves. Highs are also expected to rise well into the 80s and occasionally may reach at least the low 90s in TX/OK by the 11 to 15 day, adding to stress in drier areas. Teens in the western Plains were mostly limited to areas with protective snow cover yesterday, with any spotty damage limited to jointing wheat in far west-central KS.

In South America, rain (.50 to 2″, locally 3.5″) fell in all of Brazil except northern Minas Gerais/Bahia/Espirito Santo in the past 4 days. Light and widely scattered rain in safrinha corn through next weekend increases in Mato Grosso next week. Moisture remains adequate for corn given recent abundant rain. Soy/first-crop corn harvest improves this week, with delays next week limited to Rio Grande do Sul. Robusta coffee still lacks rains of note in the next 10 days, lowering yields. Argentina rains return Friday/ Saturday, leading to only brief harvest delays as drier weather dominates next week.

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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