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Morning Outlook


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Overnight Highlights

  • Overnight markets have corn +2-4, soybeans even, wheat +1-4, crude oil +.37, dollar -.40, gold +11.0 and the Dow even.
  • Mixed trade overnight with good volume. Lower dollar, return of hot/dry to Brazil and good interest in US exports providing support to corn.
  • France reported corn planting at 27%, lagging a year ago this week at 69%.
  • Bunge’s CEO noted that the company expects Brazil winter corn crop to be reduced by 5 to 10 mln mt due to the dry weather and they expect demand to shift toward suppliers in the Black Sea and the US.
  • Forecast in Argentina show dryer weather on tap allowing harvest to resume soon in areas that have been inundated by rain.
  • Regulators in China are implementing changes to curb speculative trading by “inexperienced traders”. This included higher margins and trading fees.
  • CFTC fund position data will be out this afternoon.

Commodity Weather Group Forecast


In the U.S., rains favored eastern OK, northern parts of the TX Panhandle, the OK Panhandle, central/southwest KS, and central/northeast NC in the past day. Rains will favor much of the Plains hard red winter wheat belt into Saturday (including snow in the foothills of the central Rockies), with weekend showers reaching much of the central/southern Midwest and Delta. The Midwest/Delta then see favorably dry weather for seeding in nearly all areas for most of next week, with a return of 11

to 15 day rain posing the next interruption to fieldwork. Overall, planting should remain at a favorable pace, and any concerns with excess moisture will remain localized. Temperatures also rebound to more seasonable levels after the short-term. The combination of the near-term rain and additional chances in the balance of the 15-day period will maintain favorable yield potential for Plains hard red winter wheat. Beneficial moisture is also expected to aid Southeast corn/wheat areas during the

next week. Pacific Northwest winter wheat is picking up patchy relief in central/far southeast WA and far eastern OR, but moisture deficits are still most likely to build near the WA/OR border in the next two weeks as 6 to 15 day showers mainly focus too far south. N. Plains/Canadian Prairies spring wheat will progress favorably during the next two weeks.


In South America, Argentina was dry yesterday, with lows in the mid 30s to low 40s. Unseasonably cold air lingers this weekend, but frost threats remain minimal for double- crop soy. Mostly dry weather now looks likely to persist through much of the next two weeks, allowing corn/soy harvest to recover. Brazil rain (.25 to .75”) was confined to coffee and far northeast soy areas yesterday. Dryness aids late soy harvest in the next 10 days. Moisture stress hampers corn in the northern 1/3 of the belt, as heat rebuilds next week. Early 11 to 15 day rains still likely benefit the southwest half of the corn 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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