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Morning Outlook

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Overnight Highlights

·         Russian President Vladimir Putin appears to be all-in in his offensive to claim at least a section of Ukraine; willing to bankrupt Russia to get what he wants.

·         The U.S. Federal Reserve is expected to release a revised monetary policy statement at 1 p.m. CST today, with possible significant implications for the currency and commodity markets.

·         The dollar rallied modestly overnight ahead of today’s Fed statement, with crude oil posting modest losses just ahead of six-year lows.

·         Strong DDGS export demand continues to support upfront soymeal usage, providing periodic support for soybeans.

·         Otherwise, deflationary trends in the commodity complex again weighed on grain and oilseed prices overnight.

·         Scattered showers continue in central and northwestern Brazil. Showers are expected to concentrate in central Brazil late this week, shifting north early next week.

·         30-day rainfall is expected to be below normal, but sufficient to meet crop needs.

·         Colder trends for Midwest wheat continue for next week, but winterkill threats remain low.

Commodity Weather Group Forecast

In the U.S., mostly dry conditions prevailed yesterday. Wetter trends for the Plains next weekend should result in improved soil moisture for nearly all of the wheat belt. Midwest wheat will see snow from this storm late in the weekend/early next week to protect much of the crop from sub-0°F readings next week. However, the Euro does pose a slight risk as snow was limited in the southwest 1/4 of the belt, with a stronger cold push threatening MO/southern IL.

Delta showers late in both the 1 to 5 and 11 to 15 day periods should improve low soil moisture in northern areas but will not be heavy enough for crop damage in wet areas of the Southeast. Pacific Northwest wheat is favored to see beneficial showers next week enhance soil moisture.

In South America, showers scattered from northwest to southeast across Mato Grosso as well as into much of central/northeast Mato Grosso do Sul, Sao Paulo, northern Parana, central/northwest Minas Gerais, far southwest Goias, and central/northeast Rio Grande do Sul yesterday. Daily showers will continue but be somewhat disorganized for the next couple of day, with more organized rains in central areas late in the week that spread northward next week.

While 30-day rain totals will remain below normal in many areas, the showers should be sufficient to meet crop needs, with some of the most notable rains possible in northeast coffee/sugar areas that have been driest recently.

Argentina picked up scattered rains in northeast Cordoba, central Santa Fe, northern Entre Rios, northern La Pampa, and central Buenos Aires yesterday. Rains taper off after exiting the east today, with the next notable rain in the 11 to 15 day. This will allow wet fields in eastern Cordoba/Santa Fe/Entre Rios/northern Buenos Aires to see some drying, but this could still prove to be a short-lived downturn.

Europe/FSU Wheat Likely to See Active Shower Pattern Next 10 Days. An active storm pattern should benefit much of FSU wheat, where moisture supplies are still limited. In Europe, localized excess rain is possible in southern areas, but most areas have been dry enough recently to minimize damage.

Morning Market Snapshot

 

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

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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