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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1, soybeans -13, wheat +2, crude oil -.36, dollar +.06, gold -1.0 and the Dow +37.
  • Mixed grain trade overnight with corn support of forecast hot weather this coming week and no more net long funds pressing on the market. Soybeans off from hints of a more cooperative August outlook and the long fund position.
  • Condition ratings this afternoon are expected to be unchanged to up a tick. Market will be adding weight to corn numbers the next couple weeks, but soybeans have a much lower correlation to final yield.
  • COT report Friday showed Managed Money in corn dropped 94k net longs to leave them long only 8,702 contracts. Soybeans were only off 7,922 contracts, maintaining a net long position of 159,407. Wheat moved to a record large short position of 114,668 after adding -12,425 net shorts.
  • Friday funds sold 13,000 corn, 7,000 soybeans and 5,000 wheat.

Commodity Weather Group Forecast

 

 

In North America, weekend rains favored central/northeast MT, central/northeast ND, northern/far southern SD, southern MN, central NE, IA, southwest WI, northeast IL, central/northwest IN, northwest OH, eastern GA, SC, and NC. Mostly mid 70s and 80s occurred across the Midwest. Showers continue to scatter into the central Midwest in the next two days. Heat gradually builds through the week in NE/KS/MO/SD, with upper 90s and 100s by the latter 1/2 of the week. Elsewhere, heat

peaks Thursday to Saturday, with upper 90s in the central Midwest and mid 90s in most other areas. This will mainly threaten stress to pollinating corn in NE/KS/SD (where the hottest readings occur) and in parts of northeast IN/northern OH/MI (where the most notable rain deficits exist) but should impact 20% or less of the Midwest as a whole given recent rains and the short duration. Temperatures moderate for the balance of the month, as the strongest ridging retrogrades west of the belt. Rain chances shifted farther south in the 6 to 15 day due to the relatively less hot pattern, adding to rain chances from the S. Plains into the Delta but limiting Midwest shower potential. However, the 16 to 30 day continues to limit the main threats for stress to about 1/4 of the Midwest (mainly around the Great Lakes). While a broad warmer than normal pattern remains possible,

rains also return from the Plains into the southern/western Midwest and northern Delta.

 

In South America, weekend rains were light across southern Argentina. Mostly dry conditions

through this weekend aid corn harvest/wheat seeding. Showers return early next week and slow

corn harvest, but damage threats are low as a drier 11 to 15 day pattern returns. Brazil rain delays

(.25 to 1”) were confined to far southern corn areas. Showers early next week and in the 11 to

15 favor Rio Grande do Sul, aiding wheat growth. Corn/sugar harvest is favorable in the rest of July

 

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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