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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1, soybeans -3, wheat +2, crude oil even, dollar +.06, gold -10.0 and the Dow +54.
  • Mixed trade overnight. Weather outlook past the heat this week looks cooperative. The oversold condition is finding some end user buying and short covering.
  • The Argentine trucker strike continues and exporters are becoming concerned that if it lasts much longer, port stocks will begin to fall.
  • Gulf corn values have firmed this week as US corn prices continue to be the most competitive on the global market. Monday’s inspections saw the fourth largest inspections of the marketing year.
  • Wheat continues to move into the feed market on a global scale as large yields and low quality have pushed cash prices below traditional feed source costs. USDA forecast the global wheat usage to be a record thanks to feed demand. Due to wheat production concerns in France, European offers are now above the US Gulf.
  • Friday will have the monthly Cattle on Feed report. Estimates are for On Feed 101.6%, Placements 106.4%, Marketings 109.5%.
  • Tuesday funds sold 19,000 corn, 19,000 soybeans and 3,000 wheat.

Commodity Weather Group Forecast

 

In North America, showers favored north-central MT, far northeast ND, northwest MN, central IA, northeast MO, southwest IL, west-central IN, eastern NC, northeast SC, southwest GA, northwest Alberta, south-central Manitoba, and central/southwest Saskatchewan in the past day. 90s were limited to the western edge of the corn belt yesterday. Patchy thundershowers will be possible in the central/northeast Midwest into Friday, with additional activity around the Great Lakes Sunday/

Monday. This will offer some relief into dry sections of MI/eastern WI/northeast IN/northwest OH, although confidence is low as the models have performed poorly again this week on the placement of rains. If the Great Lakes end up drier, better rain chances could instead shift southward from the MS Valley into southern IN. Heat peaks from Thursday to Saturday (lingers Sunday in the south), with readings mostly topping out in the mid 90s but 100s possible in mainly NE/KS/SD/MO. The hottest

areas as well as dry patches around the Great Lakes will be most vulnerable to stress on pollinating corn (20% or less of Midwest). Readings then moderate into the 80s to low 90s for the rest of the 15-day period. Rain chances have expanded in the western Midwest in the 6 to 10 day and the south in the 11 to 15 day. With a similar 16 to 30 day pattern, this should continue to focus the main threats for corn/soy stress around the Great Lakes and perhaps in parts of the Lower MS Valley soy.

 

In South America, mostly dry conditions continue through Sunday, aiding Argentine wheat seeding/

corn harvest. Brief showers on Monday/Tuesday in the central belt slows progress but keep wheat

moisture adequate. The return of a drier pattern then keeps corn threats negligible though. In Brazil,

rains arrive in Rio Grande do Sul on Tuesday, aiding wheat growth. Safrinha corn harvest makes

good progress through the end of July, as rains in the 11 to 15 day focus on far southern areas.

 

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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