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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1/2, soybeans -1/2, wheat mixed, crude oil -.11, dollar mixed, gold -6.0 and the Dow +8.
  • Mixed trade overnight ahead of the USDA report at 11:00 CT today. Weather cooling in the west and central corn-belt the next two weeks.
  • For today’s supply/demand report, analysts are forecasting 15/16 corn ending stocks at 1.72 bln bu compared to July’s 1.70 bln. 16/17 corn ending stocks are forecast at 2.26 bln vs July’s 2.08 bln bu estimate. The average guess yield for 16/17 is 170.6 bpa.
  • In soybeans, analyst are estimating 15/16 US soybean ending stocks at 320 mln bu compared to July’s 350 mln. 16/17 ending stocks are forecast at 315 mln bu vs July’s 290 mln. Trade eyes will not only be on the yield estimate, but on any changes in export pace. The average guess yield for 16/17 soybeans is 47.5 bpa.
  • Big export sales yesterday. New crop sales now equal 26% of the total USDA estimate vs the five year average on this date of 32%. Year to date corn sales are 17% of the USDA total sales estimate vs the five year average of 22%.
  • China continues to be active shoppers of soybeans, talk that they were buying US soybeans again yesterday.
  • Thursday funds sold 4,500 corn, 5,000 wheat and bought 2,000 soybeans.

Commodity Weather Group Forecast

 

 

In North America, showers favored eastern SD, eastern NE, IA, northwest IL, eastern KS, northern OH, southern MS, south-ern LA, and southern SC in the past day. Highs were mainly in the 80s to lower 90s in the Midwest. Highs will now be mainly 70s to 80s for the next two weeks with 90s confined to the western fringes of the belt. Showers steadily expand across the central and eastern Midwest this weekend and reach the drier areas in northern IN/OH easing moisture stress in one of the few remaining dry spots. Showers early next week concentrate in the southeast Midwest and Delta with heavy amounts likely to lead to some localized flooding in AR, MO, and southern IL. Another cold front drops down late 6-10/early 11-15 day bringing more beneficial moisture to much of the Midwest aiding late soy filling but possibly short changing the northeast 15% of the belt once again. The wetness particularly in the northern Delta will slow early corn/soy harvest and poses a threat to cotton quality as boll opening increases over the next two weeks. Rains are more limited in the Southeast over the next two weeks but only GA is likely to see yield declines to soy/cotton as other areas still have adequate moisture. Drier trends continue to favor spring wheat harvest in the N. Plains over the next two weeks allowing much of the crop to be brought in before a wetter 16-30 day period. The Canadian Prairies are less wet easing early harvest concerns next 2 weeks but wetter 16-30.

 

In Europe/FSU, rains (.25 to 1”) eased moisture stress for corn in Ukraine/Romania/Bulgaria yesterday, but slowed wheat harvest in Germany. Rains continue to eradicate moisture stress in most of Ukraine corn this weekend. Minimal rains in Europe wheat next 5 days improve harvest but rains then return hampering harvest in Germany, Poland, and the Baltics. Limited rains in France next 10 days keep wheat harvest delays minor but continue to stress the dry 1/4 of France corn.

 

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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