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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +1 ½, soybeans +10, wheat +2, crude oil +.65, dollar -.21, gold +7.0 and the Dow +83.
  • Higher markets overnight on concern over wet western Midwest pattern slowing harvest, large soy shipments and generally stronger tone to the commodity complex.
  • September 30th stocks report will be the next govt info on the trade horizon.
  • Safras Mercado estimates 16/17 corn acres in Brazil to be up 7.8% from last year. Corn planting is estimated 10% complete.
  • CFTC info Friday showed Managed Money to have covered 34k of their position, leaving them now net short -146,940 contracts. They continued to reduce their length in soybeans and short position in wheat.
  • The Fed meets this week and will decide on an interest rate hike.
  • Soybean and soy meal futures encountering trendline resistance on their rally this morning.
  • Market will be monitoring yield reports this week. Some areas, especially Central Illinois, reporting impressive yields but other reports are showing some disappointment due to disease and weather impacts.
  • Friday funds were estimated buyers of 8,500 corn, 8,000 soybeans and 2,000 wheat.

Commodity Weather Group Forecast

 

·         Early weekend rain slowed SE Midwest corn/soy harvest; minor rain delays in N. Delta cotton/soy harvest Sat/Sun

·         Rains mainly confined to NW 1/3 Midwest last half of this week, allowing harvest to improve elsewhere this week

·         Showers shift to SW Midwest next week but damage threats still very limited; frost concerns minimal next 10 days

·         Delta/Southeast shower activity limited allowing corn/soy/cotton harvest to progress favorably next 2 weeks

·         Upturn in rains in 6-10 in Plains slows wheat seeding but main concern is for W. TX cotton quality decline

·         Rains in Canadian wheat/canola areas slow harvest again in 6-10 day but drier 1-5/11-15 day limit damage potential

 

International Overview

 

·         Nearly 1/2 of Argentina Wheat Still Under Moisture Stress With Rain Potential Very Low Next 10 Days

 

·         Rains Favor SE 1/3 of Ukraine Wheat This Week; Rest of Belt Could See Needed Moisture in 6-10 Day

 

·         Brazil Rains Slowly Expand in N. 1/3 of Corn/Soy Area Next 10 Days Allowing Planting to Get Underway

 

·         West 1/3 of Australia Wheat/Canola Still Likely to See Scattered Showers Limit Moisture Shortages

 

 

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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