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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -1 ½, soybeans -6, wheat -1-4, crude oil +.04, dollar mixed, gold -2.0 and the Dow +26.
  • Lower trade overnight led by some profit taking in soybeans.
  • Crop conditions dropped 2% to 74% G/E in corn (compared to 61% on average) and saw 53% of the crop at dough stage vs 42% on average. Soybeans G/E were unchanged at 72% with pod sets at 69% vs 61% on average.
  • Analyst estimates for Friday’s USDA report have corn at 170.6 bpa vs 168 in July’s estimate. Soybeans are estimated at 47.5 vs the July number of 46.7 bpa.
  • French, Ukrainian and Russian corn weather forecast looks to continue the hot/dry stress for the next couple of weeks.
  • China sold 13,917 mt of reserve Corn of the 1.916 mln offered.
  • Gulf corn and soy values firming on continued export demand.

Commodity Weather Group Forecast

 

In North America, showers favored southwest KS, central SD, northwest MN, southeast AL, southwest GA, central/eastern NC, north-central Alberta, north-central Saskatchewan, and western Manitoba in the past day. Highs were in the upper 70s and 80s in the Midwest, warming during the rest of the week but peaking in only the upper 80s/low 90s for most areas on Thursday. Rains will scatter into the western Midwest from tonight into Thursday, shifting to the east from Friday through the weekend. This should recharge topsoil moisture in many recently drier sections of the northwest based on the favored Euro, with a marginally wetter trend even noted in the northern OH Valley today. Dry patches are most likely near the IA/NE border and southeast SD as well as a few spots around the southern Great Lakes (15% of the Midwest). Another uptick in showers in the 11 to 15 day should prevent any notable expansion of the drier spots, with 16 to 30 day rains favoring the southern/ western Midwest but still limited around the Great Lakes. Wet Delta conditions in the next two weeks will aid late soy development (although relief this week is less than expected for GA), with only localized wetness concerns as long as drier 16 to 30 day trends verify. Areas of surplus moisture will linger in at least 1/4 of the belt and may still impact quality in the next two weeks for Canadian wheat/canola, while N. Plains wheat harvest slows this week and more notably in the 11 to 30 day.

 

In Europe/FSU, mainly dry weather aided wheat harvest yesterday. France/U.K. remain mostly dry

in the next week, aiding wheat harvest but stressing 1/4 of French corn. Rains hamper southern

Poland harvest today and most of Germany/ Poland this weekend, but drying much of next

week aids fieldwork. Ukraine corn still sees dryness stress 1/3 of corn, but showers late in the

week cross and ease stress. 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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