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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1, soybeans +9, wheat +2, crude oil +.28, dollar +.20, gold -1.0 and the Dow +35.
  • Grain markets higher overnight with support from oversold conditions and bargain buying. Quiet news, non-threatening weather and good export demand.
  • September corn yesterday made it within 1 ¼ of the 2014 low yesterday but couldn’t coordinate follow-through sellers at that level.
  • Brazil’s ag minister is working on adjusting regulations to allow the import of GMO corn for animal feed use from the US.
  • Cash soybean meal values firmed in the west yesterday. Values were up $3 to $5.
  • Yesterday funds were reported to have sold 8,000 soybeans, 4,000 corn and 3,000 wheat.

Commodity Weather Group Forecast

 

In North America, scattered showers favored parts of central SD, southeast IA, eastern MO, southwest IL, south-central TN, AL, central/southern GA, northeast SC, and southern/eastern NC, central/southeast Alberta, and south-central Saskatchewan in the past day. Highs were in the low 80s to low 90s in the Midwest, with notable heat limited to the Delta. The forecast for the rest of this week eased (mostly 80s/low 90s), with the best chance for mid 90s in the southwest Midwest delayed until the middle of next week. The lack of more severe heat continues to limit negative impacts to corn/soy, although minor stress occurs to corn during the next few days and again late next week due to brief stretches of warm nights (70s). Occasional showers scatter into the western Midwest/northern Delta in the 1 to 5 day, favoring the central/northwest Midwest in the 6 to 10 day and the central/southeast Midwest in the 11 to 15 day. The active storm track will limit corn/soy dryness, although the e best chance for moisture stress will remain in patchy eastern areas (mainly OH/eastern IN) that shifted drier in the outlook for late this week. The combination of recent rains and occasional showers going forward should be sufficient to limit concerns for soy/cotton in the South. Pockets of surplus moisture will persist in 1/4 of the Canadian Prairies wheat/canola this month with high yields but variable quality. Rains are also projected to slow N. Plains spring wheat harvest later in the month.

 

In China, only isolated rains (.25 to 1”) fell in N. China Plain corn/soy areas yesterday. Heat stress is confined to the far northwest this week. Showers increase in drier areas in Northeast China by Friday and are likely to be more expansive next week as well, easing moisture stress on key soy-bean areas. Rains still fall in wet areas of N. China Plains corn/soy this weekend but are not enough to add to problems. Most models support much more limited rains in the area 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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