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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1/4, soybeans -1 1/2, wheat +4-6, crude oil -.34, dollar even, gold -7.0 and the Dow +18.
* Corn and soy a little lower overnight after COT data showed funds are now long soybeans and have been covering corn shorts. Wheat higher on concern temperatures in the west were colder than expected over the weekend.
* China’s Dalian exchange has corn and soybeans higher, soy meal lower.
* It’s officially spring now with yesterday’s spring equinox and the trade will be watching corn planting progress and the March 31 planting intentions report. Last year the first corn planting progress report was released April 12th – average for that date is 5 percent.
* Brazil’s Stevedore (dockworker) union announced it will hold a 24 hour strike beginning at 7am today. The president of the union said the strike could be extended.
* Commitment of Traders report on Friday showed Managed Money with options short corn -188,167 contracts (off 41,009 from the previous week), long soybeans 21,774 (up 64,680), and short wheat -67,506 (off 24,944).
* Friday’s Cattle on Feed report was neutral/slightly bearish. On Feed 100% vs 100% est. Placements 110% vs 108.3% est. Marketings 105% vs 104.7% est. This was the highest Feb placements number since 2008.

Commodity Weather Group Forecast

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In the U.S., lingering snow occurred from east-central CO into central KS and reached a few spots in the northwest Midwest early in the weekend, while light rain was noted near the OH River and more notable rains focused near the Gulf Coast and TX/OK border. Cold weekend temperatures were worse than expected in southwest KS/southeast CO/OK Panhandle/ northern parts of the TX Panhandle (up to 20% of Plains wheat). Damage was likely sustained to jointing wheat, as lows in
many areas dropped into the teens on Saturday/Sunday mornings. Another cold shot on this coming Sunday morning is not projected to be quite strong enough for damage. However, areas near the KS/CO border that will lie just south of some fresh snow cover will need to be watched closely for potential issues given the unexpected colder outcome during this past weekend. While shower events will scatter across the C. Plains frequently in the next two weeks, chances for relief in the southwest wheat belt remain limited. This will allow at least 40% of the hard red wheat belt to see moisture stress build further this month. Significant snow will focus from northern IA into the Great Lakes at mid-week, but Midwest/Delta showers are otherwise brief and relatively light until the 11 to 15 day. This will allow wet corn/wheat in the Delta/OH Valley to drain further.

In South America, rains (.25 to 1.25″, locally 2.5″) fell in Mato Grosso, western Mato Grosso do Sul, and Rio Grande do Sul over the weekend. Showers expand steadily in safrinha corn this week, easing moisture shortages. The rains will stall soy/first-crop corn harvest, with localized flooding possible in RGDS. Robusta coffee areas are no longer favored for rains and will continue to be stressed. Argentina rains (.25 to 1.25″, locally 3.25″) covered the northern 2/3 of the belt early in the weekend. Drier conditions until the end of the 10-day period will allow harvest to get back on track.

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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