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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +4, soybeans +10, wheat +2-3, crude oil -.60, dollar +.69, gold -17.0 and the Dow +90.
* Markets higher overnight with fund buying in the soy complex continuing. Wet Argentina harvest weather and dry concerns continue for Brazil second crop corn.
* Brazil’s ag minister said he will as for the government to suspend the 10% import tariff on corn to help alleviate corn supply and price pressure on the livestock feeders.
* Analysts in Argentina estimate 800k-900k hectares (around 2 mln acres) of soybeans will not get harvested due to heavy rains.
* Yesterday funds bought 20,000 corn, 15,000 soybeans and 6,000 wheat.

Commodity Weather Group Forecast

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In the U.S., rain favored central/northeast NC, southern LA, and central TX in the past day. The Midwest warms in the next 15 days, with showers limited to mainly the southwest Midwest and near the OH River next week (mostly Tuesday). This should allow Midwest seeding progress to expand favorably during the next ten days, with the next notable rain event later in the 11 to 15 day for particularly central/southwest parts of the belt. Interruptions increase in the southwest Midwest in early May but should remain a limited concern. Delta rains remain more frequent, with a chance into tomorrow for LA/MS/TN and additional more extensive rains in the first 1/2 of the 6 to 10 day and again later in the 11 to 15 day. Breaks of several days in between these events should keep flooding risks localized and allow for some progress, but the region will see the most frequent fieldwork interruptions. Substantial rain late Friday through Monday in the Plains will notably benefit prospects for winter wheat, although locally heavy totals (up to 6″) are likely in the west from the slow-moving event. The 11 to 15 day is trending somewhat wetter and would offer additional timely moisture as wheat needs build. Spring wheat areas in the N. Plains/ eastern Canadian Prairies benefit from late-week showers as well, with 6 to 15 day fieldwork picking up.

In South America, Argentine rains (.50 to 1.5″, locally 2.5″) fell across much of the belt in the past 24 hours, with heavier amounts confined to the northern fringes of the belt. Another extensive rain event this weekend will keep harvest progress very slow, with any recovery not likely until a drier pattern sets in during the 11 to 15 day. Heavy rains are limited to the northeast 1/4 of the belt, where localized flooding is possible. Brazil rains (.25 to .50″) were isolated yesterday. Rains are very limited over the next ten days for safrinha corn. Moisture stress expands, as yield losses mount in the central 1/3 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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