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Sunday Outlook



Weekend Developments

·         The harvest was stalled late last week by a rain system moving across the Midwest.

·         Light showers Monday/Tuesday will favor southern and eastern fringes of the Midwest, as well as the Delta.

·         More substantial rain comes Thursday/Friday as the remains of tropical storm Simon cross the Plains, southern and eastern Midwest, as well as the Delta.

·         Most areas trend drier for the 11- to 15-day period.

·         A hard freeze ended the growing season in much of North Dakota and a few spots of central South Dakota over the weekend. There will be quality issues as a result, but actual bushel loss is expected to be relatively small relative to this year’s big crops.

·         A hot/dry outlook is expected for Brazil’s northern belt through early November, impacting 50% of the corn/soybean area, where it’s equivalent to April in our growing season.

·         The primary focus this week will likely focus on Friday’s USDA crop report, in the context of a strong U.S. dollar that discourages ownership of the broader commodity sector.

·         Private production estimates this past week focused on a corn yield in the upper-170s and soybean yield either side of 48 bushels per acre.

·         The grain industry has seen the bushels coming in, but the private estimates are “educating” money managers thinking that USDA’s September estimates were close to correct.

·         Focus is shifting to the storage problems that this year’s big crops will present beginning later this month.

·         The southern third of Australia’s wheat belt continues under moisture stress the next 10 days, impacting grain fill.

Commodity Weather Group Weekend Summary

In the U.S., showers lingered in the eastern 1/4 of the Midwest and Southeast Friday. Cold/dry air produced the first hard freeze of the season in much of ND and a few spots in central SD. This will hamper dry-down for nearly 1/2 of the corn there, but yield losses should be minimal.

Light showers Monday/Tuesday favor the northern Delta and southern/eastern fringes of the Midwest. The main rains occur Thursday/Friday, as remains of Simon cross the Plains, southern/eastern Midwest, and northern Delta. The rains significantly benefit Plains wheat establishment, and quality declines for TX cotton are limited. Flooding in the Midwest/Delta should be isolated.

Additional rains in the 6 to 10 day will keep harvest slow for the Delta and southeast 1/3 of the Midwest, but most areas trend drier in the 11 to 15 day. Canadian Prairies harvest delays are minor in the next 2 weeks.

In South America, widespread weekend Argentine rains (.50 to 2”, locally 4”) favored eastern Cordoba into southern parts of Santa Fe/Entre Rios and eastern La Pampa/southwest Buenos Aires. Showers are more limited after exiting today but scatter into southern/northeast Argentina late Wednesday/Thursday and again late in the 6 to 10 and 11 to 15 day. Southern Buenos Aires/Entre Rios (10% corn/20% wheat) will remain most at risk for wetness concerns. Only marginal frost risks exist in the far south this Friday and again a week later, with no damage.

Brazil showers occurred in southwest Rio Grande do Sul and western/far northern Mato Grosso, with a focus on the southern 1/3 of the wheat belt in the next 2 weeks that may still cause quality concerns in RGDS. A few showers creep near the coast late in the 11 to 15 day for coffee/sugar and into the Mato Grossos briefly in the last week of October, but an otherwise hot/dry outlook for northern Brazil through early November hinders coffee bloom in over 2/3 of the belt and threatens building stress on germination for the northern 1/2 of corn/soy.

Australia Wheat Still Lacking Rains in South 1/3 Next 10 Days, Stressing Heading Wheat. Rains are minimal this week and favor the east next week. This aids filling wheat in New South Wales but leaves much of South Australia, Victoria, and far southwest areas prone to yield loss in the next 10 days.

Rain Potential Diminished for FSU Next 10 Days, About 1/4 of Area Could See Fall Growth Hampered. Dryness keeps moisture limited in 30% of Russian and nearly 20% of Ukraine wheat. Moisture for germination is sufficient, but wheat will be left more vulnerable to winterkill due to limited fall growth.


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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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

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