Home Market Market Watch Morning Outlook

Morning Outlook

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Overnight Highlights

  • Overnight markets have corn +6, soybeans +13, wheat +3, crude oil +.43, dollar -.18, gold -4.0 and the Dow +43.
  • Higher grains this morning on short-covering in the oversold condition of the markets. Cooperative weather outlook continues to weigh on price.
  • China’s Dalian Soy Meal futures were down almost 5% as traders in China worry that flood losses in livestock areas could cut feed demand. Flooding in China has affected 32 million people, 1.4 million are requiring relocation and more than 180 have reportedly died.  
  • USDA export sales will be out this morning.
  • Next Tuesday will bring the USDA’s July Supply/Demand report. Trade estimates for 15/16 corn of 1.805 vs 1.731 last year, 15/16 soybeans at 352 vs 191 last year and 16/17 wheat at 1.107 vs 980 last year.
  • EIA ethanol info came in with ethanol production off 19,000 bbls/day from the previous week while stocks were up 390,000 bbls from the previous week.
  • In November Soybeans, yesterday’s break brought the contract to a 50% retracement of the move from March 2 to June 13.
  • Yesterday funds sold 17,000 soybeans, 1,200 wheat and were even on corn.

Commodity Weather Group Forecast

 

In North America, showers favored northeast ND, southeast KS, southern/eastern MO, far southeast IA, far west-central IL, western KY, far northwest IN, central WI, central/eastern MI, far northwest OH, eastern NC, northern SC, southern Manitoba, and southeast Saskatchewan in the past day. Highs ranged from the mid 70s to near 90 in most of the Midwest. Showers will stretch from the S. Plains into the northern Delta this weekend, with scattered activity returning Monday/Tuesday to a few

spots in the northwest Midwest. 6 to 15 day rains favor the central/southeast Midwest, with a slightly drier trend around the Great Lakes and wetter in the OH Valley since yesterday. Given recent rains and the outlook, the best chances for building moisture stress will likely focus on eastern SD, southeast ND, far northwest IA, far southwest MN, southern MI, and far northern OH (15% of Midwest) during the next two weeks, although yesterday’s rain did bring temporary relief to spots around the Great Lakes. Temperatures do warm, but most of the Midwest will peak into the upper 80s to low 90s during the 6 to 15 day. Mid 90s or better will be limited to the Delta, Plains, and occasionally spots as far north and east as SD and MO. However, the lack of more severe heat will continue to limit stress for pollinating corn, and the 16 to 30 day still offers some rain to drier

sections of the western corn belt and focuses heat/dryness risks on the southern Delta and northeast 1/4 of the Midwest.

 

In South America, Argentina was dry yesterday. Light showers may slow corn harvest next week but are limited mainly to southern fringes, with most areas dry in the next two weeks. Brazil was

dry yesterday. Showers cover much of the wheat belt in the next ten days, recharging low soil moisture and aiding growth. Corn/sugarcane harvest remains favorably dry for much of the next two

weeks, with minor interruptions from rains favoring the southern third later 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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