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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +1 1/2, soybeans even, wheat -2, crude oil even, dollar +.25, gold +13.0 and the Dow -100.
* Mixed overnight trade with corn finding support on renewed export interest.
* USDA’s weekly crop progress report will be out this afternoon. Trade will be watching for signs of wheat condition deterioration and for the corn planting pace in the Delta and South.
* Ukragroconsult raised their Ukraine wheat production estimate to 18.5 mln mt, up from the previous estimate of 17.7 mln mt. Last year’s crop was 26.5 mln mt.
* Safras Mercado estimates the Brazil soy harvest 71% complete vs 74% on average. Corn harvest is estimated at 75.8% complete vs 60% last year.
* Wheat continues to face the headwinds of Europeans and Russians making room for the upcoming harvest.
* Cool, wet in the Central and Eastern Midwest look to lead to a slower start for spring work – but more ‘normal’ conditions should return following the retreat of the Canadian cold front.

Commodity Weather Group Forecast

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In the U.S., beneficial pre-planting showers are currently scattered across the southern Canadian Prairies and near the U.S. border, with activity also noted in the Pacific Northwest and Mid-Atlantic in the past day. Scattered showers will occur from IA into the Great Lakes and OH Valley later today/tomorrow, lingering around the Great Lakes through the rest of the week. Broader coverage of the southern Midwest/Delta will hold off until next Monday/Tuesday, with additional activity in the 11 to 15 day. These events will slow southern corn/rice seeding again and keep soft wheat in the Delta unfavorably wet, but a 10-day stretch of dry weather ahead of the next event will prevent more serious wetness concerns. Cold air (20s, with teens in snow-covered areas) in the eastern Midwest currently and again this weekend will not pose a damage threat to soft wheat. Warm and dry conditions will allow moisture stress to build further for jointing wheat in 40% of the belt this week, but the 6 to 10 day rain chances have improved for TX/OK. 11 to 15 day rains are then expected to focus on the C. Plains, and parts of western KS may struggle most to see relief. 6 to 15 day forecast confidence does remain quite low due to poor model agreement. However, stress could be reduced to 1/4 of the belt, with additional relief possible in the 16 to 30 day.

In South America, Brazil rains (.25 to .75″) were isolated in northern Mato Grosso/southern Rio Grande do Sul yesterday, with little change this week. Showers expand in the northern and southern thirds of the belt next week, but the central 1/3 remains dry. Moisture stress will impact early safrinha corn pollination in 1/4 of the belt. Argentina rains (.25 to 1.25″, locally 3.5″) favored Buenos Aires/C. Santa Fe/N. Entre Rios yesterday. Rains (up to 4″) are confined to the northeast 1/4 of the belt this week. All areas dry next week to allow harvest to resume, but rain in the 11 to 15 day stalls most harvest again.

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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