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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +4, soybeans +10, wheat +2-4, crude oil +61, dollar +.30, gold -7.0 and the Dow +86.
  • Higher markets overnight, led by soybeans.
  • Brazil’s senate voted to put President Rousseff on trial which will require her to step down during the proceedings.
  • Market continuing to try determine how many corn acres will be switched to soybeans on the delayed planting of the last 1/3 of the acres and higher profitability of soybeans.
  • Argentina’s Rosario Exchange lowered their estimate for Argentina 15/16 soybean production to 55 mln mt, down from the previous estimate of 59 mln.
  • Tomorrow is the last day of trade for May grain contracts.
  • USDA weekly export sales will be out this morning.
  • Yesterday funds sold 9,000 soybeans, 7,500 corn and 2,000 wheat.  

Commodity Weather Group Forecast

 

 

In the U.S., rains were again at or below expectations yesterday, favoring southern/eastern MO, southern/far northern IL, central WI, southwest IN, western KY, far northern TN, eastern OK, central/far northwest TX, and northeast NC. Scattered showers will remain possible in the eastern Midwest today, with another weak disturbance tracking across the belt on Friday/ early Saturday. Broader interruptions returning to the southern corn belt Monday to Wednesday. Weekend light frost should still pose limited threats along the northern edge of the Midwest, but central MN/WI will need to be watched most closely. While the upper Midwest tends to still be mostly dry next week, the forecast shifted wetter in the central/southeast Midwest. This will add some interruptions to fieldwork, with the Delta also seeing a few showers today and then extensive rain delays next week. The western Midwest/northern Delta then trended wetter in the 11 to 15 day, with drier/warmer conditions still possible in the eastern Midwest to aid seeding. Extensive rains by early next week aid Plains winter wheat yields once again, while spring wheat seeding delays will mostly occur in southern Canada in the 11 to 15 day due to wetter trends. This may still miss the driest northwest 30% of the Canadian Prairies, although a few very light 6 to 10 day showers are now possible.

 

In South America, Argentina showers (.25 to .75”, locally 3.5”) were isolated in western fringes of the belt yesterday. Next showers arrive this weekend and remain light and widely scattered. Next week is mostly dry, keeping harvest delays minor. Showers in the 11 to 15 day could slow later harvest. Brazil rains (.25 to 1.25”) were isolated in the corn belt yesterday. The next significant showers scatter across the corn belt early next week and again the following weekend. The rains aid late pollination and filling but are still spotty enough in the northern 1/3 to allow moisture stress to linger in 20% 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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