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Morning Outlook

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Overnight Highlights

  • Overnight markets have corn -3, soybeans -9, wheat -2, crude oil -.11, dollar even, gold -2.0 and the Dow -24
  • Lower grains this morning. China placed duties on US DDGs, good yield reports in soybeans continue to be reported and a little dryer forecast for the corn-belt. Corn yield reports continue to be more erratic than many have anticipated.
  • China added a 33.8% duty on US DDGs being imported in response to the US complaint over China’s corn and wheat subsidies to the WTO.
  • China and Canada agreed to terms to settle their Canola import dispute. New standards will give Canadian exporters more confidence in sales to China.
  • USDA will be out with its monthly Cattle on Feed report this afternoon. Avg estimates On Feed of 101.1% while Placements are expected at 113% of a year ago.
  • Heavy Iowa rains prompted Cargill’s Cedar Rapids facility to stop accepting corn at its river terminal. The river is forecast to crest next Tuesday.
  • Yesterday funds sold 7,000 corn, 1,000 wheat and bought 1,000 soybeans.

Commodity Weather Group Forecast

·         Heavy rains in N. IA causing localized flooding; rest of Midwest favorably dry yesterday aiding early corn/soy harvest

·         Late weekend rains in Midwest less intense limiting flood risks and allowing quicker harvest recovery next week

·         Rains early in 11-15 day slow Midwest harvest but E. 1/2 delays still likely to be minor; main set back in NW

·         Delta rains early next week substantially scaled back with only minor delays; Southeast drier, harvest to recover

·         Rains in 1-5/11-15 day diminish dry spots in Plains wheat aiding germination; W. TX cotton drier after early week rain

·         Canadian wheat/canola harvest wetter next 10 days slowing progress and raising the potential for localized damage

 

International Overview

 

·         Argentina Shower Event Late Next Week Still Weak; 1/3 of Wheat May Remain Under Moisture Stress

 

·         NW 1/2 of Ukraine Wheat Back on Track to Pick Up Needed Rains Increase Next Week Aiding Germination

 

·         Brazil Rains Aid NE 1/4 of Corn/Soy Planting This Weekend, C. 1/3 Sees Needed Rains Following Weekend

 

·         NE China Corn/Soy Harvest Weekend Rain Delays Brief; Rains Improve Wheat Seeding Prospects Next Week

 

 

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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