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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -3, soybeans -2-4, wheat mixed, crude oil -.65, dollar +.05, gold -17.0 and the Dow +63.
  • Markets mixed overnight on better than expected crop ratings and rain forecast for parts of the Midwest the next couple days and a back-off in the prospects for heat.
  • USDA corn rating of 75% good to excellent matched last week while soybeans dropped 1% to 73% vs the average of 65%.
  • Winter wheat harvest was reported at 25% complete which matches the long term average.
  • China’s customs administration reported May soybean imports at 7.6 mln mt, up 25% from a year ago. Year to date pace is 14.5% above a year ago.
  • Brazil’s second crop harvest is starting, reportedly 8% complete.
  • Friday will see Cattle on Feed, Cold Storage and the Quarterly Hog and Pigs report.
  • Yesterday funds sold 17,000 corn, 6,500 soybeans and 4,000 wheat.

Commodity Weather Group Forecast

 

 

In North America, thundershowers favored east-central NE, southwest IA, northern MO, central IL, central/northern IN, and far southwest MI in the past day. Highs were mostly 80s north to low 90s south in the corn belt. The showers in the southwest Midwest were patchy but did offer some relief for some of the driest areas in the corn belt, with another chance on Thursday/Friday and also intermittently in the 6 to 15 day. This may gradually narrow dry spots for early pollinating corn, although heat (mid to upper 90s) by Wednesday/Thursday and again during the weekend will still pose a threat to dry spots that remain in MO/KS/NE. Heat does then moderate during the balance of the 15-day period. Showers through Thursday will otherwise favor northern IA/southeast MN through northern IL/northern IN and OH. This will aid topsoil moisture, although rain deficits otherwise build in the northern/eastern corn belt in late June/early July as our outlook remains drier than the GFS guidance in the 6 to 10 day. However, the 16 to 30 day is still showing little support for severe heat in the corn belt as pollination ramps up, which could lessen stress. In addition, the western Midwest trended wetter today for the 16 to 30 day, as a monsoon feed of moisture expands out of the Rockies. In the South, heat in the next several days may add some stress to recently drier corn areas in TN/AR/KY, but wetter 6 to 15 day trends in the Delta/Southeast would recharge moisture.

 

In South America, Brazil corn/sugar areas had light showers in the far south yesterday. Rains remain limited to the southern 1/3 of the belt this week. Showers are even more limited next week aiding harvest progress. Argentina was dry yesterday and remains dry this week aiding corn harvest. Rains have been scaled back for the weekend event to just the eastern third of crop areas. It should still aid dries wheat areas in the northeast but notably limit delays to corn harvest.

 

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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