Morning Outlook

Overnight Highlights

• Overnight markets have corn +1, soybeans +8, wheat +2, crude oil even, dollar +.14, gold -2.0 and the Dow -10.
• Markets higher overnight. Soybeans leading from big demand support, potential for smaller old crop soy stocks and potentially disruptive weather on the horizon.
• USDA crop condition rating dropped corn 1% to 74% and listed dented at 76% vs 69% on average. Soybeans were unchanged in their ratings and saw 12% of leaves dropping, matching the average.
• Stats Canada will be out with their July 31 stocks this morning. Canola stocks are expected to be off -45% from a year ago.
• CONAB yesterday lowered their Brazil corn crop projections again with their latest estimate down at 67 mln mt vs their previous estimate of 67 mln. The short Brazil crop has effectively taken Brazil out of the global corn export market.
• EIA energy report will be out Thursday due to the Labor Day holiday.
• Funds reportedly bought 4,000 soybeans and sold 500 corn and 500 wheat yesterday.

Commodity Weather Group Forecast

·         Rains heaviest (2”+) in parts of WI and near MN/IA border overnight; active pattern rest of week in most of Midwest

·         Additional showers occur in latter 1/2 of next week, favoring C. & SW Midwest and slowing early corn/soy harvest

·         Wet fields hinder maturing corn/soy in C. & SW Midwest; more limited rain trends in 11-15 day mitigate damage risks

·         Frost in MN/WI on GFS operational model at middle of 11-15 day, but very unlikely given lack of other model support

·         Limited rain in South aids corn/soy harvest and favorable for soy/cotton recovery in Southeast after recent heavy rain

·         Diminishing showers after this week allow Canadian wheat/canola harvest pace to improve

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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