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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -5, soybeans -12, wheat -4, crude oil +.23, dollar +.34, gold +3.0 and the Dow +4.
  • Lower markets overnight as weather maps in the extended forecast are looking cooler and wetter.
  • Crop condition ratings had corn maintaining the 76% G/E rating compared to 64% on average. Silking is at 56% vs 46% average for the date.
  • Soybean crop conditions held their 71% G/E rating with 18% setting pods vs 13% on average while Spring Wheat good/excellent lost a point to 69% G/E.
  • China only sold 15k mt of the 1.966 mln mt of corn that was offered on auction. The corn was from the 2012 and 2013 seasons.
  • Yesterday’s US corn export inspections were the fourth largest of the marketing year.
  • Brazil’s second crop harvest pace is accelerating according to Safras Mercado noting corn harvest at 42.3% complete vs 17.9% last year.
  • Yesterday funds bought 10,000 soybeans, 6,000 corn and 3,000 wheat.

Commodity Weather Group Forecast

 

In North America, showers favored northeast CO, central/southwest NE, far southwest IA, far northwest MO, central/southeast IL, southern IN, northeast MT, far southern GA, north-central Saskatchewan, and central/southern Alberta in the past day. 90s were limited to southwest IL, central/southern MO, and KS. Scattered showers will occur tonight into Thursday and again this weekend in the northern Midwest. While rain chances have been scaled back for the central Midwest from the balance of this event, the showers have a better chance at reaching dry spots around the Great Lakes. Heat still builds this week, with fairly limited changes from yesterday. Most areas peak in the mid to upper 90s from Thursday to Saturday, with the best chance for hotter readings into the 100s in the southwest 1/4 of the belt this week. Mid 90s linger in the southern Midwest on Sunday, but highs then are mostly mid 80s to low 90s for the balance of the 15-day period to limit stress to pollinating corn in the hottest and/or driest areas of the Midwest this week (20% or less of the Midwest). 6 to 15 day showers are a bit more extensive but mainly favor the southern/northwest Midwest. An active storm track in the 16 to 30 day should aid soy development in much of the Midwest/northern Delta, with the best chance for stress in driest areas around the Great Lakes and parts of the southern Delta through the first 1/2 of August.

 

In South America, mostly dry conditions in the next six days benefit Argentine corn harvest/

wheat seeding. Rain event early next week briefly slows corn harvest in the central belt, but damage

concerns remain minimal. Brazil showers early next week and in the 11 to 15 day favor Rio

Grande do Sul, aiding wheat. While no further threats, lows dipped into the 30s yesterday in 1/4

of the coffee belt, with patchy burn back to vegetative growth in pockets that dipped near freezing.

 

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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