Home Market Market Watch Morning Outlook

Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +3, soybeans +10, wheat mixed, crude oil -.28, dollar +.20, gold +1.0 and the Dow +70.
  • Higher markets overnight on the forecast of a ridge setting up for next week to bring hot/dry back to the Midwest. Weather for this week continues to have active showers. Each weather model this week will be watched closely by the trade.
  • December corn and November soybeans gapped higher to open last night and held the gap in overnight trade. This sets the technical possibility of an ‘island bottom’ in corn – weather outlook will determine if this can hold.
  • USDA crop production and supply/demand reports out tomorrow at 11:00 CT.
  • Trade expectation of no change in the crop condition ratings this afternoon.
  • Friday’s COT report showed Managed Money in corn off -71,623 to a net long of 103,103, soybeans were off -27,942 to a net long of 167,328 and wheat added -20,244 taking their net short position to -102,244.
  • Friday funds bought 8,000 corn, 8,000 soybeans and 3,700 wheat.
  • The S&P 500 index is trying to challenge its highs from May of 2015.

Commodity Weather Group Forecast

 

 

In North America, weekend showers favored central/northeast Alberta, eastern Saskatchewan, southern Manitoba, MT, ND, northern/eastern SD, MN, north-central IA, southern IN, southern MO, southeast AR, south-central TN, western KY, far northeast LA, central/far northern MS, AL, far southwest GA, northeast SC, and eastern NC. Highs ranged from the upper 70s to near 90 in the Midwest. An active Midwest shower pattern will continue for much of this week, with the focus gradually shifting from west to south. Thundershowers scatter into mainly the central/southeast Midwest from Sunday to Tuesday, with warmer/drier trends building in the 11 to 15 day. Highs will range from the 80s to low 90s in the next ten days, with the best chance for at least mid 90s focusing on parts of SD, NE, KS, MO, southern/western IA, and southwest IL in the 11 to 15 day. This will pose the main risk for corn stress in areas that may continue to struggle with significant rain deficits around the Great Lakes, northern KS, southern NE, and SD (15 to 20% of the Midwest). Heat does appear to ease in the western Midwest in the 16 to 30 day, with showers expanding. This leaves the northeast 1/4 of the Midwest warmest/driest in late July/ early August. Dry patches linger in about 1/4 of Delta soy, but weekend showers did offer some patchy relief. Heavy rains are occurring this week in the parts of Saskatchewan/central Alberta and will cause localized flooding for wheat/canola areas.

 

In South America, Argentina was mainly dry over the weekend, with light showers confined to northeast fringes of corn. Light showers this week may slow corn harvest in the southern/eastern quarters, but a drier pattern returns for the rest of the 15-day period. Brazil weekend rains (.25 to .75”,

locally 1.5”) favored the southern 1/3 of wheat. Showers cover much of the wheat belt in the next

ten days, aiding growth. Corn/sugarcane harvest delays are limited to the southern third.

 

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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