* Sunday evening open; corn +2, soybeans +3, Wheat +7.
* Historical strength storm Patricia avoided major damage in Mexico with a majority of its path being in mountainous regions. Parts of East Texas received 5″ to 20″ from the storm that has been now downgraded into a “remnant low”.
* In Argentina, Scioli is seen as leading the election – but will likely face a run-off.
* Freepoint Commodities, a large player in energy and metals trading, has announced the formation of an ag trading group over the next few months. A positive sign for interest in ag commodities after the exit several trading firms over the last couple years.
* The International Monetary Fund is set to ok the inclusion of China’s yuan in the lender’s benchmark currency basket. Beijing is pushing for the yuan to join the Special Drawing Rights basket as a part of its long-term strategic goal of reducing dependence on the dollar.
* Expect another week of big soybean shipments as China continues to take immediate deliveries.
Commodity Weather Group Weekend Summary
In the U.S., heavy rains (5-20″) were confined to E. TX. Mainly beneficial rains (.25 to 1.5″, locally 3″) have fallen in Delta soft red wheat with today’s flooding rains confined to south fringes, minimizing damage for wheat and late cotton/soy harvest. Showers (.10 to .75″) benefit Midwest wheat this weekend but S. IL, IN, and N. OH were short changed. Those areas should pick up needed rains the middle of this week improving moisture in time to establish soft red wheat. Plains hard red wheat should see rains return by next weekend and ease dryness in N. OK and S. KS but the NE 1/3 of KS wheat could still get missed hampering crop vigor going into the winter. Mid-west corn/soy harvest delays will be minor as rains remain mostly light with notable intervening dry spells.
In South America, weekend showers in Brazil were widely scattered in the Mato Grossos and Goias. This week showers initially pick up in western wheat areas but by mid-week shower activity shifts to central and northern corn/soy areas as well as the southern 3/4 of coffee. A cold front sets off another push of showers in the 6 to 10 day period further enhancing moisture for corn/soy/coffee areas. Showers in the 11 to 15 day period are likely to taper off but remain most active in coffee areas. Wheat harvest areas will see occasional rain delays but breaks are expected to allow fieldwork to progress and damage potential is minor. Only minor soy areas in NE Mato Grosso and N. Goias may still be too dry for soy seeding but encompass less than 10% of crop area. In coffee areas Espirito Santo is the most likely area to still see delayed bloom. Sugarcane fieldwork will be occasionally slowed but dry spells are extended enough to keep damage minor. Argentina saw showers in the southwestern corner of the wheat belt this weekend. Rains this week aid main corn/soy areas in the north but miss key south-ern wheat areas where soil moisture is becoming short. Rains are very limited in the 6 to 10 day but there is a potential for relief in the southern wheat belt in the 11 to 15 day which is essential as heading peaks in the area.
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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