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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -3, soybeans +3, wheat -5-8, crude oil -.32, dollar -.05, gold +4.0 and the Dow +58.
* Corn lower after six days higher and better planting weather prospects. Soybeans continue to find fund support while wheat lower on anticipation of moisture relief in the Plains.
* USDA will include corn progress in this afternoon’s planting progress report. Expectations are for 2% vs 5% average pace.
* CFTC report Friday showed Managed Monday short corn 161,865 (up -53,432), long soybeans 73,741 (off -1,709) and short wheat 67,738 (off 2,094).
* Safras Mercado estimates Brazil soy harvest 83% complete – the same pace as last year and 2% ahead of the long term average.
* Trade continuing to watch moisture stress in large areas of Brazil’s second crop corn.

Commodity Weather Group Forecast

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In the U.S., rain/snow favored southern MI, far northern OH, and far northern IN earlier in the weekend, but rains also scattered into central/southwest MO, southern IL, southern IN, southern OH, southern parts of the NE Panhandle, east-central CO, far southern KS, central/southwest OK, and central parts of the TX Panhandle in the past day. Weekend cold in eastern Midwest soft wheat areas was insufficient to threaten damage (mostly 20s). Rains continue to track through the southern
Midwest/southeast Plains/South through tonight, but a break of a week occurs before the next event returns. A break of at least several days also occurs after this event, with warming temperatures after the next few days aiding fieldwork in between shower events. This will also keep flooding issues localized with any of the heaviest rain totals in the Delta corn/rice/wheat. Plains showers will return to the west by Friday and expand across nearly the entire hard red winter wheat belt through Monday (averaging 1.5 to 2.5″). This will ease moisture stress significantly. Topsoil moisture will also improve in the eastern Canadian Prairies and N. Plains spring wheat. Showers favor the C. Plains, northwest Midwest, and Gulf Coast in the 16 to 30 day, while warm/drier conditions aid seeding the most in the far northern Delta and eastern Midwest.

In South America, Brazil rains (.25 to 1″, locally 2″) favored the northern and southern thirds of safrinha corn over the weekend. Showers remain most active in those areas this week, with drier weather for most of the belt in the 6 to 10 day. Rains return to the southern 1/3 in the 11 to 15 day, keeping the central 1/3 of the crop subject to stress and likely yield loss as the key pollination period gets underway. Argentina weekend rains (.25 to 1″, locally 2″) fell in the northeast 2/3 of the belt. Showers in the next 10 days keep corn/soy harvest progress very slow, but damaging rains focus northeast 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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