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Morning Outlook

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Overnight Highlights

·         Germany foots the biggest portion of the bill for Greece’s 240-billion euro twin bailouts, but 52% of Germans want Greece to leave the euro-zone, up from 41% the previous month. Some European economists are now coming to a similar conclusion.

·         Greece’s unemployment rate rose to 26.1% in the fourth-quarter of 2014 according to data just released, up from 25.5% the previous quarter.

·         The dollar slipped lower from nearly 12-year highs in profit taking overnight, but still remains very close to those highs ahead of the Fed’s meeting to discuss monetary policy on Tuesday and Wednesday of this week.

·         Goldman Sachs told its investors to brace for the euro to fall to 0.85 and 0.80 respectively versus the dollar in 2016 and 2017 as the euro-zone continues to struggle.

·         Crude oil fell to a new six-year low of $43.57 before coming off its lows overnight.

·         Russia’s President Putin was seen at a press conference early today after being absent from public view for 11 days. Putin is reaching out to North Korea’s Kim to build relationships between the two countries.

·         Corn, soybeans and wheat saw modest losses overnight following chart damage done on the dollar’s strength last week.

·         Excessive rains in February likely took 1 to 2.5 million bushels off the top of a very big record soybean crop in Argentina, according to crop analysts surveying the problem late last week.

·         Beneficial, but light showers are expected in the Plains winter wheat belt the next 10 days.

·         Northern Brazil rains continue to threaten minor harvest delays, but boost safrinha corn yield prospects.

Commodity Weather Group Forecast

In the U.S., rains (.50 to 1.5”, locally 3”) favored the Delta, southeast 1/4 of the Midwest, and Carolinas early in the weekend, with showers (.25 to 1.5”) in the Pacific Northwest later in the weekend. Showers in the Delta/southeast Midwest are mainly light this week, allowing excessively wet fields to drain. Some early corn planting may begin late in the week, but more showers in the 11 to 15 day could halt progress.

Showers are likely in the S. Plains wheat belt this week to aid early growth in the drier areas, particularly OK. C. Plains wheat is not favored for showers until later next week, and confidence is limited. Midwest cooling remains weaker in most models, and wheat should begin spring growth in conjunction with an upturn in showers in the 6 to 15 day. The 16 to 30 day wetness in the Delta/southeast Midwest could lead to more wetness concerns for wheat.

In South America, weekend scattered showers in northern Brazil favored central/eastern Sao Paulo, southern/western Minas Gerais, southwest/eastern Goias, and northern/central Mato Grosso. Rains will continue to focus on the north in the next 10 days, easing slightly in the 11 to 15 day and picking up in the south. This may hinder soy harvest a bit, but no serious problems are expected. The moisture will aid safrinha corn/coffee/sugar growth.

Argentina picked up scattered showers in central/northwest Buenos Aires, southern Santa Fe, Cordoba, and northeast La Pampa that were near expectations. While a few showers are possible in the west by Thursday/Friday and again late in the 6 to 10 day and in the north in the 11 to 15 day, the outlook is less active overall compared to Friday. This will prevent the wettest fields in central/northeast Cordoba and central Santa Fe from expanding, although early corn/soy harvest will still be a bit sluggish.

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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