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Morning Outlook

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Overnight Highlights

* Overnight markets have corn even, soybeans +1, wheat +2-4, crude oil +1.45, dollar +.05, gold +1.0 and the Dow +100.
* Grains steady on narrow range overnight trade. Market will be watching fund activities in this afternoon’s CFTC report and for weather developments in the Midwest.
* Yesterday’s corn and soybean export sales came in above trade estimates while wheat was below.
* USDA Supply/Demand report will be out Tuesday at 11:00. Average trade estimates for ending stocks; corn 1.845 bln bu vs 1.837 in March, Soybeans 454 mln bu vs 460 in March, Wheat 977 mln vs 966 in March.
* Yesterday funds bought 10,000 corn, sold 6,000 soybeans and 3,500 wheat.
* China had a rare display of citizen protests against the merger of government run ChemChina and Syngenta on concerns over increase in GMO crop plantings.

Commodity Weather Group Forecast

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In the U.S., showers were limited to very spotty sections of the Midwest in the past day, mainly in the far east. Showers will continue to scatter into the Great Lakes and far eastern Midwest into the weekend, with rain returning to the Delta and southern Midwest by Monday/Tuesday. This will hinder fieldwork again in wet southern areas (mainly Delta corn/rice/cotton), but the region has seen a break of at least ten days ahead of this event. Additional rains are expected in the 11 to 15 day in the
Delta after a 6 to 10 day break, but flooding issues should be localized in the Delta. Fieldwork should progress in between showers in the Midwest, particularly with warming after early next week. The Plains will see scattered showers occur at the start of next week near the KS/OK border and into parts of TX/OK, with rains also likely later in the 6 to 10 day across the western Plains. While the outlook is drier as a whole compared to yesterday for the next two weeks in the Plains, many of the
driest western areas may still see some improvement. Central KS is probably the most at risk to be short-changed based on our current outlook, although confidence remains low due to the continued inconsistency in the model guidance. The 16 to 30 day continues to show a fairly wet outlook in the Plains and trended drier in the Midwest.

In South America, Brazil rains (.25 to .75″, locally 2.5″) were isolated to northwest Mato Grosso and southern Rio Grande do Sul yesterday. Showers remain most active in the northern 1/3 of safrinha corn over the next 2 weeks, but scattered showers are more likely throughout the rest of the belt next week as well. However, coverage is likely to be spotty, leaving 1/4 of crop at risk of stress. Argentina rains (.25 to 1″, locally 2″) fell in the northeast 1/4 of the belt yesterday. Showers this weekend and again late next week will slow corn/soy harvest progress, but damaging rains likely stay north of the main 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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