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Morning Outlook

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Overnight Highlights

·         This is a critical week for Greece once again, as Prime Minister Tsipras meets for the second time in five days today with German Chancellor Angela Merkel, who is the largest contributor to its stalled $259 billion aid package.

·         Greece needs to find enough cash to make payments on $1.6 billion in pensions and salaries by the end of the week.

·         Greek citizens pulled 450 million euros from their bank accounts Friday, on top of 1.1 billion euros withdrawn the previous three days on fears the country will fall out of the euro-zone.

·         The dollar traded over 500 points lower in follow-through selling overnight after experiencing its worst week since 2011.

·         Crude oil prices fell on data showing that Chinese imports have weakened, while officials from Saudi Arabia stated they will not curtail production to prop up prices.

·         Meanwhile, the weaker dollar encouraged fresh gains in grain and oilseed prices, where chart signals are improving as well.

·         Chinese officials say they are shifting their policy away from growing bumper crops toward producing “safer” foods.

·         China imported 22.6 million bushels of corn from Ukraine in February, continuing its dependence on the Black Sea supplies, even amid its own big supply of high-priced reserves.

·         Total Chinese corn imports in February came to 23.7 million bushels, up 26% from the previous year.

·         The South should see good planting progress over the next 10 days.

·         The Plains winter wheat belt should see very limited moisture over the next 15 days.

·         A wetter trend this week should boost safrinha corn growth.

Commodity Weather Group Forecast

In the U.S., weekend rains favored central/eastern TX, southern AR, northern LA, MS, southern/western AL, and SC, while significant snow (locally 4 to 9”) favored southeast MN/southwest WI. Mid-week rains favor the central/southeast Midwest and far northern Delta after a few patchy showers scatter through the central/southeast Plains.

Showers will otherwise be light/scattered until the 11 to 15 day, when wetter weather focuses on the northern Delta/OH Valley. Early corn seeding should see only very brief interruptions in the meantime across the South in the wake of the weekend rain.

Wetter wheat areas in the northern Delta will also benefit from the break. However, a return of wetter weather next month in the Delta/eastern Midwest may still cause wetness concerns to rebuild for wheat quality and corn seeding. Relief for Plains wheat over the next 2 weeks remains limited. While stress is minor for now, occasional warmth (80s south) will also draw down moisture, and the 16 to 30 day is similar to drier than Friday. Light showers in the next 2 days will provide slight relief to OR/ID wheat.

In South America, showers (.50 to 1.5”, locally 4.5”) in Brazil favored northeastern Mato Grosso, Minas Gerais, Goias, and northern Sao Paulo over the weekend. Showers taper off in northeast areas early this week but return to the west later in the week, and additional rains in the 6 to 10 day spread from south to north. The break in rains in the main soy harvest areas currently should allow favorable progress to be made. The upturn in rains then will ensure safrinha corn in southern areas maintains favorable moisture after a week of drier weather. The 16 to 30 day forecast is wetter than normal for corn, which would aid early pollination.

Argentina dried out this weekend after rains in the north ended early Friday. Showers remain limited in the next 2 weeks, hampering late soy filling in about 15% of the belt. Early corn/soy harvest will benefit.

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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