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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn even, soybeans +5-6, wheat +1-3, crude oil -.10, dollar +.15, gold even and the Dow +64.
  • Mixed trade overnight as the market anticipates the USDA supply and demand report at 10:00 CT.
  • Corn planting progress came in at 64% complete vs 45% last week and 50% on average. Soybean planting was reported 23% complete vs 8% last week and 16% on average. Spring wheat planting at 77% vs 54% last week and 51% on average.  
  • Trade is expecting the USDA report to show US 16/17 corn ending stocks at 2.3 bln bu that compared to the expected for the 15/16 ending stocks at 1.84 bln bu.
  • Analysts expect 16/17 soybean ending stocks at 405 mln bu that compares to the expected for the 15/16 ending stocks estimated at 425 bu.
  • Cordonnier lowered his estimate for Brazil soybean production down 500,000 mt from last week and corn down 1.0 mln mt.
  • Yesterday funds sold 12,000 corn, 8,000 soybeans and 4,500 wheat.

Commodity Weather Group Forecast

 

 

In the U.S., scattered rains favored central/northeast MT, central SD, southern MN, southeast NE, all but central IA, northern/ southeast MO, northern/far southwest IL, far southwest IN, western KY, western TN, far northern MS, central/far northern AR, and southeast OK in the past day. Showers scatter into the eastern Midwest today/Thursday/Saturday, with additional activity in the western belt Wednesday/Friday. The rains should mostly total .50 to 1.25” and could even be disorganized enough to miss some spots, but most areas will encounter limited planting opportunities for the rest of the week. While the far southern Midwest shifted slightly wetter in the 6 to 10 day, the balance of the Midwest remains dry (but cool), allowing some slow recovery in fieldwork prior to additional planting delays in the 11 to 15 day (particularly south and west). Light weekend frost should still be limited to the northern edge of the Midwest. Intermittent showers will occur in the northern Delta through Thursday night, with a wet 6 to 15 day across much of the belt to hinder late planting. Plains moisture remains quite favorable for late winter wheat growth and good yield potential. Spring wheat areas dry out in Canada after Thursday, allowing recovery in planting progress after some welcome moisture in the eastern 2/3 of the belt (dryness lingers in the western 1/3).

 

In South America, Argentina was mainly dry yesterday. A few light showers favor the northwest 1/4 of the belt tomorrow, with more widespread light showers this weekend. Otherwise, mainly dry conditions favor corn/soy harvest in the next two weeks. Brazil rains (.25 to 1.5”, locally 4”) fell in the southern 1/3 of the corn belt yesterday. Showers linger in the southern 1/3 of the corn belt in the next two days. The next shower event moves across the corn belt early next week and should finally push light rains into the drier northeast 1/3 of the belt, easing moisture stress that is currently cutting yields.

 

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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