Home Market Market Watch Morning Outlook

Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1, soybeans +10, wheat +1-5, crude oil +.63, dollar +.15, gold -6.0 and the Dow +30.
  • Higher markets overnight with continued export demand support and oversold technical conditions. Weather warm in the east but generally continues non-threatening.
  • Very little change expected for this week’s crop condition ratings, perhaps a slight downtick.
  • Informa estimated US corn yield at 169.8 bpa with production at 14.694 and soybeans at 47.7 for a production of 3.958 bln bu. Compiled trade estimates will be out early this week in preparation for Friday’s USDA report.
  • New crop CIF soybeans values firm as China continues to be active buyers of US Gulf and PNW soybeans.
  • Cash soy meal values were up $2-$3 in the west and steady in the east.
  • US corn export demand remains strong thanks to our position as the most competitive on the world market.
  • Friday’s CFTC info showed that as of last Tuesday, Managed Money increased their net short corn position by -38,894 to a net of -104,432. Their largest net short position since April. They lowered their long position in soybeans by -15,351 contracts, leaving them net long 106,338. In wheat, they barely budged off their huge short, unloading 1,126 contracts leaving them net short -129,058 contracts.

Commodity Weather Group Forecast

 

In North America, weekend showers favored parts of KS, southern/north-central MO, central/southeast AR, LA, central/ western MS, southern IN, western KY, central TN, southwest GA, southern SC, Alberta, and central/southwest Saskatchewan. Highs were in the upper 70s to low 90s across the Midwest during the weekend, with more notable heat limited to the Deep South. Most areas peak in the upper 80s/low 90s with a warm-up this Wednesday to Friday and then moderate, with patchy mid 90s. While the GFS shows a drier risk in the western Midwest this week, the favored Euro guidance allows beneficial showers to reach the west Wednesday/Thursday and spread east Friday to Sunday. This is a wetter trend from IL into the OH Valley versus yesterday, although areas around the Great Lakes are still likely to hold onto dry patches. A few spots in the northwest Midwest may also be missed (mainly parts of northwest IA and adjacent areas) during the next ten days, but well under 1/4 of the Midwest should be prone to any moisture stress. Showers expand in the southern/western belt in the 11 to 15 day, with fairly broad 16 to 30 day Midwest coverage helping to finish out filling corn/soy. Delta rains also aid late soy growth in the next ten days. Rains this week and again from the 11 to 15 day into the 16 to 30 day will slow harvest progress for the N. Plains/S. Canada and maintain some quality concerns in Canada, although yield potential remains high.

 

In Europe/FSU, rains (.25 to 1.5”) hampered wheat harvest in northern Germany/Poland over the weekend. France/U.K. remain mostly dry in the next ten days, aiding harvest. Showers continue to hamper Germany/Poland harvest this week, but drier 6 to 10 day conditions aid fieldwork. Ukraine dryness is likely to ease for the drier 1/3 of corn later this week/early next week, as light showers cross the region. The lack of notable heat also helps to limit yield loss for drier 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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