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Morning Outlook

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Overnight Highlights

* Overnight markets have corn even, soybeans -4-7, wheat -1-5, crude oil -37, dollar -.30, gold +4 and the Dow -45.
* Grains traded generally lower overnight however corn has recovered most of its losses. End of week losses weighed on the market open. Trade will be alert to a resurgence of Chinese speculative buying in the soy complex and stability in wheat from less short covering than expected in Friday’s COT report.
* Planting progress will be out this afternoon; expect spring wheat around 50% planted and corn around 30 to 35%.
* CME Group will be raising margin requirement this week on grain futures contracts.
* Weather conditions look to be improving over the next 10 days as rains in Argentina lighten and some parts of stressed Brazil find some rain relief and cooler temperatures.
* European wheat futures are continuing to trade near their lows on favorable weather outlook.
* Friday’s Cattle on Feed: On Feed April 1 101% vs est 101%, Placements in March 105% vs est 16%, Marketings in March 107% vs est 106%.
* USDA Cold Storage March 31 beef stocks 466.99 mln lbs vs expected 491.5 mln lbs.

Commodity Weather Group Forecast

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In the U.S., rains favored parts of eastern MT, central/southeast ND, northeast SD, central/south-central MN, northern WI, western IA, eastern NE, northeast KS, NC, and northeast SC during the weekend (mainly late), with significant rain/snow also noted in southern Alberta/far southwest Saskatchewan. Limited activity has otherwise aided seeding in the Midwest/Delta, and showers mainly shift through the far northern Midwest today. However, a more active storm track then develops for a week, starting tomorrow. This will slow fieldwork in the Midwest/Delta, with locally heavy totals (4″+) threatening isolated flooding in central/southern parts of the corn belt. However, the lack of a wet pattern recently will prevent any serious wetness concerns, and a more limited rain pattern arrives for much of the corn belt from the middle of next week into most of the 11 to 15 day to allow fieldwork to recover. While the outlook has shifted cooler, there are no frost threats, and weekend frost was limited to eastern MI and western parts of the NE Panhandle. Several rain chances will benefit Plains hard red winter wheat yield potential in the next two weeks, with the next notable event late this week. Current showers are slowing spring wheat seeding (but aiding moisture) in the N. Plains/southwest Canada. Interruptions are more limited after mid-week.

In South America, Argentine rains (.25 to .75″) were confined to fringes of the belt until last night, when they favored the southeast 1/3. Similar showers linger in the north 1/2 today. Dryness then dominates until the 11 to 15 day, when showers return to much of the area. Harvest improves in the southwest 2/3 of the belt, while recovery in the northeast 1/3 will be limited. Brazil rains (.50 to 2″, locally 3.5″) were confined to Rio Grande do Sul and stalled late soy harvest yesterday but dries out at mid-week. Showers spread across Brazil corn in the next two days, easing stress in the southwest 3/4 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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