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Morning Outlook

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Overnight Highlights

·         Germany’s finance minister proposed a vote by the citizens of Greece over whether they wanted to remain in the euro-zone.

·         The euro is higher in the wake of the news, with the dollar at fresh three-month lows, testing chart support.

·         Crude oil prices are modestly higher following yesterday’s stocks report showing a larger-than-expected drop in supplies in the latest week, although they remained at record large levels for the week.

·         Corn and wheat futures saw follow-through buying overnight after attempts to push prices lower Wednesday failed. Speculative hedge fund managers hold large short (sold) positions in these grains.

·         Soybeans again bounce off support at Tuesday’s lows overnight, but buying was limited by USDA’s large new-crop stocks estimate.

·         The trade expects the National Oilseed Processors Association to peg its member soybean crush at 147.827 million bushels for April tomorrow morning, down from 162.8 million the previous month. Water Street submitted an estimate of 152.375 million bushels.

·         A cool pattern is expected to keep much of the Midwest dry next week.

·         Frequent rains are expected to keep the Southern Plains and western Delta wet.

Commodity Weather Group Forecast

In the Midwest/Delta, light showers favored central/eastern ND, eastern NE, eastern KS, central/southwest IA, northern/eastern MO, south-central MN, far northeast AR, and northwest MS in the past day. These showers will head northeast and favor the Great Lakes in the next day, with weekend showers favoring the western Midwest again but scattering east by Monday before exiting. Delta showers will be disorganized but gradually increase, although models may be overstating the initial extent.

Regardless, the most notable interruptions to fieldwork should be in the Dakotas/MN/WI/IA/MO/eastern NE/eastern KS through the weekend, shifting to the Delta next week. Cooler weather will otherwise focus showers mostly south of the Midwest next week, with the best chance arriving in the southwest at the end of next week. This still leads into broader 11 to 15 and 16 to 30 day rain, slowing late seeding at times but aiding Midwest growth.

Already wet sections of AR will struggle to dry out to aid late seeding in the next few weeks, while the wetter 16 to 30 day may raise soft wheat quality concerns in the Delta. A cool shot on Monday morning will bring frost to ND but is unlikely to cause freeze damage to emerging corn. In the Plains, showers favored TX, southern/eastern OK, eastern KS, and eastern NE yesterday, and a very active storm track over the next 2 weeks and into the 16 to 30 day will continue to threaten issues with excess moisture and wheat quality concerns (primarily TX/OK for now).

Rains in the near-term will aid N. Plains spring wheat, but showers shift mostly south of the belt in the 6 to 15 day before returning in early June. Limited rains will continue to support rapid planting in Canada but will draw down moisture and could lead to development of some early stress by month’s end.

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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