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Morning Outlook

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Overnight Highlights

·         Creditors are giving an initially positive reaction to steps taken by Greece to meet requirements for the four-month credit extension.

·         As a result, the euro firmed and the dollar broke modestly lower overnight.

·         The dollar found additional weakness from Fed Chair Janet Yellen’s comments that the agency would not be rushed to raise interest rates.

·         Crude oil shows modest gains, but remains below $50 per barrel.

·         A judge ordered an end to Brazil’s trucker’s strike in some regions, but that may be easier said than done since it is not an organized union strike but rather individual truckers deciding to slow things down.

·         However, the critical Port of Santos has been reopened to truck traffic after a blockade was removed there, allowing soybeans to flow into the port once again.

·         The strike has also slowed harvest as the flow of diesel to farms had been blocked in many areas.

·         Some trucks that drive through blockade areas are seeing their contents dumped when they slow down or stop.

·         Scattered showers were generally disorganized in central and southeastern Mato Grosso yesterday.

·         Rains should become widespread again in northwestern areas of Brazil by Friday, continuing through the first third of March.

·         This will continue to slow harvest progress and keep safrinha corn planting at least one-week behind schedule.

·         Soybean prices pulled modestly lower on signs that the Brazilian truckers strike may be ending.

·         Wheat prices dropped as Iraq cancelled a tender to buy hard wheat.

Commodity Weather Group Forecast

In the U.S., showers favored the Southeast yesterday and then central/eastern TX overnight (.10 to .75”). A mix of rain/snow/sleet will cover the South today, with more rains there later next week. This will continue to eradicate soil moisture deficits and aid spring growth. Showers in the 11 to 30 day are still expected to favor the Delta and may slow early corn planting.

Widespread snow (3 to 8”) is likely across the Plains and Midwest over the weekend and early next week. This will protect the wheat from cold pushes, but northern parts of IL/IN may first see additional winterkill late this week (10% of Midwest). The added moisture in the Plains wheat will benefit spring growth that will increase from south to north over the next month.

In South America, showers were disorganized in Brazil yesterday but mainly occurred in central Bahia, northwest Goias, south-central Mato Grosso, central/southeast Mato Grosso do Sul, central Minas Gerais, far southeast Sao Paulo, and eastern Parana. Showers expand by Friday back into northwest Brazil, remaining active through much of the 6 to 15 day period.

This will keep safrinha corn seeding delayed by a week or more in Mato Grosso, threatening reduced yields in late-planted areas. Welcome rains in coffee/sugar areas in the next 10 days will limit stress, and additional late-week showers in far southern Brazil should eliminate most lingering dry spots.

Argentina picked up locally heavy rain from central Cordoba into central Santa Fe, with scattered showers also in southern Buenos Aires. Additional significant rain rolls across the belt in the next 24 hours, with localized flooding possible in Cordoba and northern/western Santa Fe. These wetter northwest areas also see rain on Sunday, but showers then ease until late in the 11 to 15 day to prevent more severe wetness concerns.

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

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