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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +4, soybeans +14, wheat +2, crude oil even, dollar -.20, gold +7 and the Dow +3.
* Continued startling moves in the soybean complex overnight. Grains higher across the board, led by continued buying in the soybean meal market (chart below). May soybeans took out their July swing high in the overnight trade.
* Spot board soybean crush margin trading at its highest level in four months at 76 cents.
* USDA export sales will be out this morning and Stats Canada will be out with their planted acreage intention estimates.
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Commodity Weather Group Forecast

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In the U.S., rains favored northeast/east-central NE, western IA, southeast SD, southern IL, southeast MO, northeast AR, western TN, southwest MS, central LA, and central/eastern TX in the past day. Most of the showers scatter into the eastern Midwest during the next two days and track across the Midwest again on Sunday/Monday but favor the far north, with more extensive coverage developing mid to late in the week and again in the first 1/2 of the 11 to 15 day to slow corn seeding. The western Midwest has trended wetter in the 6 to 15 day due to warmer conditions overall and a northward shift in the storm track. MO/KS/NE are expected to see the heaviest totals in the 6 to 15 day, but flooding risks are low. The GFS shows light frost early in the 6 to 10 day for MN/WI/northeast IA but is more aggressive than most guidance. Spotty showers linger in the eastern Delta today and then track into the Southeast, with minor seeding interruptions at the start of the 6 to 10 day in the northern Delta and early in the 11 to 15 day in much of the Lower MS Valley. However, fieldwork should progress fairly well overall in the South. While not as wet next week in the southwest Plains, hard red winter wheat conditions should remain favorable, although N. Plains spring wheat areas trended wetter in the 6 to 15 day and will see a few extra interruptions.

In South America, Argentine rains (.25 to 1.5″, locally 3.5″) fell in the northeast 10% of the corn/soy belt yesterday. The next showers (.25 to 1″, locally 2″) cross this weekend. Drier conditions settle in next week and could extend into the first week of May. Harvest pace should improve in the southwest 2/3 of the belt, while recovery in the northeast 1/3 will be very slow. Brazil dryness continues to cut yields for corn through the weekend in much of the belt. Showers expand into the southwest 1/2 of the belt early next week and ease stress but likely die out in the north, offering only very limited relief.

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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