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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +2 1/2, soybeans +5-7, wheat +1-4, crude oil +.40, dollar -.05, gold +5.0 and the Dow +37.
* Higher markets on export interest, dry concerns for Brazil’s second crop corn and ongoing fund buying in Soybeans.
* USDA supply and demand out this morning at 11:00 CT. April report is usually uneventful. Market expects uptick in corn and wheat stocks and small tightening of soybean stocks.
* A committee in Brazil’s lower house voted yesterday in favor of impeaching President Dilma Rousseff for allegedly manipulating public finances. The Brazilian currency was up strong toward four month highs.
* Yesterday’s progress report had corn planting at 4% complete compared to the average of 5% and spring wheat was set at 13%.
* USDA condition ratings came in below analysis expectations at 56% good/excellent.
* Funds bought 11,000 soybeans yesterday and sold 10,000 corn and 9.000 wheat.

Commodity Weather Group Forecast

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In the U.S., rain favored central/southern OH, southern IN, southern IL, southeast MO, central/southern AR, southwest TN, northern LA, MS, AL, and along the TX/OK border in the past day. Heaviest totals (locally up to 6″+) were in northern LA, central MS, and central AL. Drier weather prevails in much of the corn belt until at least Monday of next week, with warming temperatures helping to spur seeding progress. Intermittent but relatively short-lived seeding interruptions then occur in the Midwest during the balance of the 11 to 15 day from occasional shower chances. Showers were added to the eastern Delta/ Southeast on Thursday/Friday and will cause a few extra seeding delays in the region, but showers otherwise hold off until the 6 to 15 day to allow for some near-term progress (particularly in the northern Delta). A few showers scatter through TX in
the next couple of days, but the most widespread Plains rainfall occurs from late Friday through Monday. Extensive coverage of 1 to 3″ or more remains likely for the hard red winter wheat belt to ease crop stress significantly. Showers will also aid soil moisture for spring wheat areas in the southeast 1/2 of the Canadian Prairies and N. Plains later this week. The 16 to 30 day focuses the wettest conditions on the C. Plains and parts of the Deep South.

In South America, Brazil rains (.25 to .75″) fell in Mato Grosso yesterday. Showers linger in the northern 1/3 of the belt this week and die out next week. Rains return to the southern 1/4 of the belt over the next 10 days. The central 1/2 of safrinha corn lacks rains, and moisture stress expands as yield loss begins to impact pollinating corn. Argentina rains (.25 to .75″) fell in the northwest 1/4 of the belt yesterday. Rains are active across the belt over the next 10 days, keeping corn/soy harvest very limited. Heavier amounts in the northeast 1/3 of the belt raise a localized flooding risk over the next 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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