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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1/4, soybeans +1/2, wheat -1, crude oil even, dollar -.30, gold +9.0 and the Dow -5.
* Mixed trade overnight following yesterday’s weak poor technical close and positioning ahead of the USDA reports today at 11 CT.
* Trade estimates for today’s quarterly stocks report as of March 1 are; corn 7.798 bln bu vs 7.750 LY, soybeans 1.557 bln bu vs 1.327 LY and wheat 1.354 bln bu vs 1.140 LY.
* Prospective Plantings acre estimates; corn 89.99 mln vs 87.99 LY, soybeans 83.07 mln vs 82.65 LY, all wheat 51.665 mln vs 54.644 LY and spring wheat 13.086 mln vs 13.247 LY.
* Yesterday funds reportedly sold 15,000 corn, 6,000 soybeans and 8,000 wheat.
* USDA export sales report will be out this morning. Trade will be watching to see if the recent increase in Brazilian soy values have led to more US sales.
* Brazil’s Ag Minister proposed scrapping “some” import taxes on corn to make it easier to import Argentine supplies to alleviate the high prices and supply crunch faced by domestic users.
* Some rumblings of Brazil’s second crop corn facing dry conditions for the month of April.
* End of month and end of first quarter today.

Commodity Weather Group Forecast

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In the U.S., moderate to heavy rainfall (2 to locally 5.5″) in much of the Delta overnight is leading to some flooding in the wettest spots, particularly central/northeast AR, far southeast MO, and far western TN. Midwest showers favored northeast IA, southeast MN, WI, central MI, central/southern MO, central/southern IL, and central/southwest IN. The storm heads eastward into tomorrow, favoring the TN Valley, southeast OH Valley, eastern Great Lakes, and Southeast. The wet weather will stall
fieldwork again in much of the Delta, although showers are limited next week in most of the Delta to ease wetness. Another round of notable rains is possible in the region in the 11 to 15 day though to interrupt fieldwork in the southern Midwest/Delta. Cool temperatures (mostly 20s) next week in the eastern Midwest are unlikely to be cold enough to threaten wheat damage. Showers were limited to the northwest/eastern edges of the Plains wheat belt in the past day, and showers are minimal in the
next ten days. Warmer temperatures (80s to low 90s south) also build next week. The best chance for rain remains in the 11 to 15 day, and some GFS guidance remains more generous in the southwest Plains than our outlook. However, our outlook is only slightly wetter and still misses the southwest 1/3, although rain chances do still improve in late April for the region.

In South America, Brazil saw rains (.25 to 1.25″) in southeast Minas Gerais/southeast Mato Grosso do Sul/southwest Mato Grosso/eastern Parana yesterday. Showers remain limited in Brazil over the next 2 weeks, allowing first-crop corn/soy harvest to accelerate. Soil moisture shortages could resurface by mid- April in the Center-West, posing a threat to early pollination. Argentina corn/soy harvest stalls, as rains cross the belt tomorrow and persist in the north early next week. Another surge of rains later next week should further set back harvest progress, especially in the northeast 1/3 of the belt.

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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