Home Market Market Watch Morning Outlook

Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +10, soybeans +17, wheat +6, crude oil +86, dollar -.27, gold -17.0 and the Dow +154.
  • Hot/dry forecast has grains higher overnight.
  • Weekly export sales will be out this morning.
  • Last trading today for July contracts.
  • CME will be raising initial margin on corn from $1,375 to $1,540 and move soybeans from $2,750 to $2,970.
  • NOPA June crush report out tomorrow. Average estimates of 145.4 mln bu vs 152.2 mln in May. Expecting a slight drop in soybean oil stocks.
  • Wednesday funds bought 14,000 corn, 7,000 soybeans and 500 wheat.

Recent rains have provided good moisture relief in many areas in the Midwest. However the forecast hot and dry weather moving has the potential to cause stress in parts of both the western and eastern corn-belt that have been behind normal on recent rains.

Commodity Weather Group Forecast

 

In North America, rains favored northeast KS, south-central MN, central/eastern MO, southeast IA, central IL, central IN, central/western OH, and parts of southern/eastern MI in the past day. Highs were in the 80s to low 90s in the Midwest. Showers during the rest of the week will largely occur from the far southern/far western Midwest into the northern Delta, with rains then tracking from northwest to southeast across the belt on Sunday/Monday. The continued active pattern will aid topsoil

moisture and limit notable dryness ahead of hotter conditions that remain expected for the 6 to 15 day. The main stress to pollinating corn (impacting about 20% of the belt as a whole) will focus on the hottest sections of the Plains (100s), including NE, KS, and southern SD. Dry spots in northern OH and northeast IN will see peak heat in the low to mid 90s next week but will also see some stress. Heat does ease into mostly the upper 80s/low 90s in much of the Midwest by the 11 to 15 day,

but mid 90s to low 100s linger in mainly MO/NE/KS. The 16 to 30 day remains warmer than normal but focuses the main concerns for heat/dryness to impact corn/soy on the northeast 1/4 of the Midwest. Near-term rains will help to limit dryness in the Deep South to mainly parts of southern AR/LA/southwest MS/GA. However, dryness may expand in AR/MS during the next few weeks to encompass up to 1/3 of Delta/Southeast soy.

 

In South America, Argentina was dry yesterday and should remain mostly dry through next week,

aiding corn harvest/wheat seeding. Rains return in the 11 to 15 day, favoring the south 1/2 of corn

and leading to limited harvest delays. Brazil rains (.25 to 1.25”) favored the central 1/3 of wheat and

southern 1/4 of corn yesterday. Showers persist through the weekend, aiding wheat. Corn/sugar

harvest delays in the south 1/2 of the belt this week end next week, as drier weather returns.

 

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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