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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -3, soybeans +2, wheat -3, crude oil +.17, dollar steady, gold -2.4 and the Dow +12.
* Mixed overnight trade following last week’s USDA report. Soybean complex continues to find fund buying support while the acre cloud hangs on corn. Planting weather (looking cool for now) along with the April 12 WASDE report will be trade focus.
* USDA reported Friday that 420.8 mln bu of corn were used in February to produce ethanol vs 394.1 mln in February of last year.
* Lower prices in corn looks to have world business back showing buying interest.
* AgRural estimates the Brazilian farmer has sold 60% of the 15/16 soy crop to date (other estimates are as high as 70%). This compares to 53% at this date last year while harvest is estimated 76% complete.
* Friday’s Commitment of Traders report showed that as of the end of Tuesday, Managed Money net positions were; short corn -108,433 (off 46,136), long soybean 75,450 (up 21,768) and short wheat -69,832 (off 12,055).

Commodity Weather Group Forecast

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In the U.S., weekend rains were heaviest in SC, GA, southern AL, and along the Gulf and Mid-Atlantic coasts, with lighter showers also noted in southern parts of the TX Panhandle, central/northeast TX, and around the Great Lakes. Showers will be light but frequent from Wednesday into Saturday in the northern/eastern Midwest and far northeast Delta, but broader rains hold off until after the weekend in the southern Midwest/Delta and again in the 11 to 15 day. These rain events will slow Delta corn/rice seeding again and keep soft wheat quality concerns in place given already wet fields, but the break in the wetness during last weekend and through the next week will mitigate more severe wetness concerns. Showers will aid Plains wheat with these two 6 to 15 day rain events but could leave up to the southwest 1/3 of the belt with stress, although wetter forecast risks do remain. The 16 to 30 day continues to favor expanding rains in late April that would help to ease S. Plains dryness, with occasional planting interruptions also favoring the central/southwest Midwest. Soft wheat is not advanced enough for damage from eastern Midwest cold pushes in the next week. Most areas were not cold enough in the Plains during the weekend either, although very spotty sections of central/southwest KS dipped near 20°F briefly on Saturday.

In South America, Brazil weekend rains (.25 to .75″, locally 2″) focused in northern Mato Grosso/southern Rio Grande do Sul. Showers remain focused in the far northwest/far southern corn/soy belt in the next two weeks. Brazil moisture shortages first develop in Mato Grosso do Sul safrinha corn areas. First-crop corn/soy harvest will accelerate except for RGDS. Argentina saw widespread weekend rains (.50 to 2″, locally 4″) stall corn/soy harvest. Showers delay harvest further across the belt early this week, with localized flooding in the northeast 1/4 of the belt as rains persist there through the 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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