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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -7, soybeans -22, wheat -7, crude oil -.52, dollar even, gold +15.0 and the Dow -97.
  • Lower grain markets this morning as fund liquidation continues on the lack of threatening weather in the forecast coupled with good crop condition ratings.
  • USDA reported corn conditions at 75% good/excellent, unchanged from last week and above the average of 67%. Soybeans were rated at 70% G/E, down 2% from last week but still above the average of 63%.
  • Winter wheat harvest is reported at 58% complete vs the average of 54%.
  • Strategie Grains revised down their estimate of the French wheat crop to 36.5 mln mt from last month’s estimate of 38.5 mln mt.
  • The soybean complex will have expanded limits today with soybeans at $1.00, meal at $30 and oil at 400 pts following meal’s limit move yesterday.
  • Funds were estimated sellers of some 25,500 soybeans, 22,000 corn and buyers of 2,000 wheat.

Commodity Weather Group Forecast

 

In North America, thundershowers (more than expected in eastern IA) favored central/eastern IA, south-central MN, southern/western WI, northern/central IL, far east-central AR, northwest MS, northern AL, central TN, and central/southeast KS in the past day. Highs ranged from the low 80s to low 90s in the Midwest, with hotter readings limited to KS/southern NE. Rains continue through Friday, including wetter trends around the Great Lakes versus yesterday’s outlook. The 6 to 10 day also trended wetter in the central/southeast Midwest, and this will leave areas near the MO/IA and NE/KS borders as well as far west-central IL (10 to 15% of Midwest) at most risk for significant moisture stress. Showers will be limited in the southern/ eastern Midwest in the 11 to 15 day, but the northwest trended wetter. Rain chances have also improved for the northern Delta in the next five days, easing dryness concerns. However, LA and the southern 2/3 of MS/AR may still see building

stress for soy in the next two weeks due to heat/dryness. The 16 to 30 day continues to focus the warmest/driest weather on the southern Delta and northeast 1/4 of the Midwest, with the rest of the Midwest and northern Delta similar to wetter compared to yesterday. Extensive rains in spring wheat areas in the short-term will be beneficial for late growth in the U.S. areas, but locally heavy rain (2 to 4”+) in the western 1/3 of the Canadian Prairies early next week could threaten localized flooding.

 

In South America, Argentina rains (.25 to 1”, locally 2”) were confined to the northeast fringe of

corn/wheat yesterday. Drier weather this week and only light showers next week allow corn harvest

to make progress. Brazil rains (.25 to 1”) eased dryness in southern wheat yesterday, with active rains benefiting wheat in the next ten days. Corn/sugarcane harvest remains favorably dry

this week. Rains expand next week, slowing harvest progress in the southern third 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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