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Morning Outlook

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Overnight Highlights

·         The dollar is sharply higher this morning, trading to its highest level since February 12, ahead of yet another deadline for Greece and ahead of two days of critical Congressional testimony from Fed Chair Janet Yellen beginning tomorrow morning.

·         Crude oil is down nearly $2 this morning and back below $50 per barrel on global concerns.

·         Greece has until the end of the day today to meet policy requirements necessitated by Friday’s four-month funding extension agreement.

·         The Fed faces its greatest threat of seeing its powers curbed since 1978 as Janet Yellen prepares to testify this week.

·         Russian support for an all-out offensive by rebels against Ukraine appears to be increasing.

·         A truckers strike is slowing soybean movement to ports, extending the U.S. export season.

·         Heavy rains, locally 3 to 6”, fell in Mato Grosso over the weekend.

·         Rains diminish now until Thursday evening, leaving a narrow window for fieldwork.

·         Corn and wheat prices are 1 to 2 cents lower this morning, while soybeans are 3 cents higher.

Commodity Weather Group Forecast

In the U.S., weekend snow (3 to 7”, locally 12”) favored central sections of IL/IN/OH and northern MO, protecting wheat from cold this week. There is still a small strip in northern parts of IL/IN that lacks adequate snow, and lows below -5°F in northern IL this morning will lead to spotty winterkill.

More snow is likely in the Midwest next weekend, adding protection from the cold pattern over the next 2 weeks. Plains wheat saw 2 to 6” of snow in the western 1/3 of the belt over the weekend and is likely to see more snow in much of the belt late this week to aid moisture and protect the crop. Showers in the Delta wheat belt of .50 to 2” (locally 4”) improved soil moisture, and additional rains over the next 2 weeks threaten only isolated flooding.

In South America, weekend showers increased in northern/western Rio Grande do Sul, Santa Catarina, and central/far southeast Parana and also lingered until late in the weekend in much of Mato Grosso, western Goias, and central/eastern Bahia, while Argentine showers were limited to the western edge of the belt.

Brazil rains will remain south-focused through mid-week, but rains now begin to scatter back into the northwest by Thursday night or Friday to slow safrinha corn seeding and soy harvest again until the 11 to 15 day. This will keep corn seeding in Mato Grosso about a week behind normal. The southern showers are improving recently drier soy areas in RGDS, and models remain supportive of widespread 6 to 10 day follow-up rain in coffee/sugar areas.

Widespread and locally heavy rain in the northwest 3/4 of the Argentina corn/soy belt occur at mid-week, aiding soil moisture. Only a few spots in the northwest (mainly Cordoba) may encounter localized flooding. Driest areas will be in the southeast over the next 2 weeks, but showers last week did benefit these areas.

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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