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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +6, soybeans +22, wheat +5, crude oil -.50, dollar -.09, gold +5.0 and the Dow +5.
  • Higher grains this morning as the USDA report is behind and the market can watch the hot/dry weather expected ahead.
  • According to China’s Administration of Customs, year to date soybean imports stand at 9.9% higher than one year ago.
  • Reports of the expected ridge for next week state it will be the highest magnitude one to setup over Iowa since 1979.
  • Yesterday funds bought 9,000 soybeans, 4,500 corn and 4,000 wheat.

Commodity Weather Group Forecast

 

In North America, rains favored north-central/southeast KS, central/western MO, far southeast IA, west-central/far southern IL, southern/northwest IN, central MI, west-central KY, east-central NC, Saskatchewan, southern Alberta, and southern Manitoba in the past day. Highs were in the 80s to low 90s in the Midwest. Scattered showers occur in the southern Midwest and around the Great Lakes into tomorrow, with weekend rains favoring the central/northwest Midwest and then scattering

through the southeast early in the 6 to 10 day. The expected rains will aid pollinating corn and help to limit dry spots, although current dry spots in southern NE and around the Great Lakes could still see gaps. Rains diminish during the balance of the 15-day period, with occasional scattered activity in the north/east. Heat also builds, peaking Tuesday to Saturday and then easing slightly during the balance of the 11 to 15 day. Highs are projected to peak in mostly the low 90s for the northern/eastern Midwest, with mid 90s or better central/southwest (100°+ and the greatest risk for stress in NE/KS/SD). Our 16 to 30 day outlook still favors near to above normal temperatures but poses the warmest/driest risks for the northeast 1/4 of corn/ soy and parts of the Deep South. However, near-term rains will limit driest areas in the South to northern LA/southwest MS/ GA for now. Expected 6 to 15 day drying is needed in western KY, where localized flooding occurred again in the past day.

 

In South America, Argentina had lingering light showers in the southern wheat belt yesterday. A

few more light showers are possible in the far south this weekend but miss corn areas, allowing

harvest to advance. Brazil rains (.25 to 1”, locally 2”) favored the central 1/3 of wheat and southern

1/4 of corn yesterday. Showers this week aid wheat growth. Corn/sugar harvest delays favor

the southern 1/2 of the belt this week, but mainly dry weather returns next week.

 

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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