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Morning Outlook

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Overnight Highlights

·         Officials from the International Monetary Fund, European Central Bank and European Commission reported Tuesday that Greek officials are not adhering to the February aid extension deal, nor are they cooperating.

·         The Federal Reserve will conclude two days of meetings today by releasing a revised monetary policy statement at 1 p.m. CDT, with a press conference at 1:30 p.m. Investors expect the Fed to remove the word “patient” from its statement on raising interest rates.

·         The dollar is modestly lower this morning in consolidation ahead of the Fed statement.

·         Crude oil is trading $1 lower after setting a new six-year low of $42.05 overnight on supply concerns.

·         Corn basis firmed late Tuesday as processors try to encourage farmer selling, while soybean basis was mostly steady.

·         The first cargo of soybeans left Brazil’s new northern port on Tuesday, allowing one more route for soybeans to take in reaching the global market.

·         Dry areas of Oklahoma should receive rain the next two days, although hopes for moisture in the central Plains in the 6- to 10-day period have diminished somewhat.

·         Next week’s showers in Argentina should benefit late soybean development.

·         Grain and oilseed prices bounced modestly overnight from significant losses seen on Tuesday.

Commodity Weather Group Forecast

In the U.S., light snow showers scattered across the far northwest Plains, while rain showers scattered into mainly southern/eastern TX, the western edge of the TX Panhandle, and northeast OK. Showers in the next 2 days will still bring welcome showers to the southeast 1/3 of the Plains, particularly OK. However, the C. Plains outlook is drier in the 6 to 10 day. Stress will remain minor for now, but limited 16 to 30 day activity in NE/KS may allow for stress to gradually increase.

Rains will focus south of the wettest soft wheat areas in the northern Delta into the weekend, but increasing showers will slow early corn seeding to the south. Showers return in the 11 to 15 day, but a northward shift in rains to the Midwest next week may offer better Delta planting opportunities and should not exacerbate wetness in wheat areas. The better Midwest showers would also aid pre-planting moisture. A wetter pattern remains in the 16 to 30 day outlook for the Delta and may cause wetness concerns to ramp back up. Pacific Northwest showers early next week should keep wheat conditions stable for now.

In South America, Brazil showers (.25 to 1.25”, locally 2”) favored northern/western Mato Grosso, southern/western Minas Gerais, southern Goias, and northern Sao Paulo yesterday. Showers remain active in northern/central areas this week, keeping second-crop corn well-supplied with moisture. Rains taper off in much of the corn/soy belt next week, with rains favoring coffee areas in the northeast and soy areas in the far south.

Argentina showers (.50 to 2”, locally 3”) were confined to the southwest 15% of the corn/soy yesterday. Showers this week will be confined to the far west but scatter across the belt next week. The rains would benefit the late soy development in northern Buenos Aires but could exacerbate wetness in C. Santa Fe. Drier conditions in the 11 to 15 day should still allow corn/soy harvest to make favorable progress in most 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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