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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +9, soybeans +25, wheat +5, crude oil +1.22, dollar -.54, gold -12.0 and the Dow +189.
  • Higher markets overnight from more heat building into the extended forecasts, China demand and firmer outside markets.
  • USDA condition ratings were unchanged in Corn at 75% good/excellent (trade expected 73%) and Soybeans lost a point to 72%. Spring wheat lost 4% at 72%.
  • Winter wheat harvest is 46% complete vs 39% on average.
  • China was active in Brazil and Argentina yesterday buying several cargoes for August.
  • Yesterday funds bought 11,000 soybeans and sold 3,000 corn and 5,000 wheat.

Commodity Weather Group Forecast

 

In North America, showers favored far southwest IA, far southeast IL, far southeast MO, west-central KY, TN, northeast AR, northern MS, northern AL, eastern CO, southwest NE, and far western/northeast KS in the past day. Highs mainly were in the 70s northwest to low 90s south/east in the corn belt. Rains mainly focus on the far southwest Midwest this week, spreading through the far southern Midwest and offering needed moisture to the northern Delta early next week. Rains then reach the northwest Midwest late in the 6 to 10 day and spread southeastward in the 11 to 15 day. This event has been shifted slightly farther east versus yesterday. Given current areas of notable moisture deficits and the projection for the next two weeks, this will leave southeast IA, near the MO/IL border, central/southeast MI, and far northern OH at most risk for building dryness concerns by the end of the 15-day period. The 6 to 15 day has trended warmer, with mid 90s or better mainly focusing on the Plains, Delta, and southwest Midwest. The European model shows low 100s late in the 6 to 10 day into the heart of the corn belt but is likely too aggressive given its recent track record and a lack of ensemble support. Our 16 to 30 day outlook has not changed. A warm pattern prevails in the corn belt, but the hottest/driest risks remain in the northeast 1/3 of the belt. Late wheat harvest interruptions in the C. Plains ease in the 6 to 15 day.

 

In South America, Argentina weekend rains (.25 to 1”) favored the southern 1/2 of the wheat/corn.

Light showers taper off today but pick back up late this week through early next week, keeping corn

harvest stalled. Wheat seeding will be slow to pick up, but moisture supplies are much improved for

the bulk of the crop. In Brazil, dry weather continues to aid corn/sugarcane harvest in the next two

weeks. Showers are expected to expand across southern wheat areas, easing dryness.

 

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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