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Morning Outlook

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Overnight Highlights

·         Ukraine reports that thousands of Russian troops and tanks are pouring across the border as war escalates.

·         The dollar traded modestly higher following Wednesday’s Fed statement, with crude oil consolidating just above nearly six-year lows.

·         Malaysian palm oil broke sharply overnight to trade near five-week lows due to plentiful supplies of edibles oils on the world market.

·         South Korea purchased 10 million bushels of optional origin corn overnight.

·         Saudi Arabia tendered for 24.2 million bushels of hard wheat.

·         China’s state corn reserves are expected to climb by a record volume this year.

·         Global trade sources believe that Ukraine will ramp up corn exports to make up for lost revenue for restricted wheat exports.

·         There is good model agreement on widespread coverage for central Brazil over the next 10 days, and in northern areas in the 6- to 15-day period.

·         Rains in northwestern areas are expected to be scattered enough to allow active harvest progress next month.

·         Showers are still on track to benefit Plains wheat this weekend.

·         Corn saw follow-through selling overnight after breaking through key support near $3.76 on Wednesday.

Commodity Weather Group Forecast

In the U.S., mostly dry conditions dominated yesterday. While some models lessened showers for the Plains this weekend, guidance still supports improvement in soil moisture for the southeast 3/4 of the belt. Midwest snowfall has lessened in some models as well, but most solutions still support enough accumulation to protect wheat from sub-0°F readings next week.

Delta showers in 1 to 5 and 11 to 15 day periods should enhance low soil moisture in northern areas but will not be heavy enough for damage in wet areas of the Southeast. The 16 to 30 day showers focus on the Southeast and keep that area on the wet side, but damage from standing water should be limited to southern GA given dry spells in between rain events.

In South America, showers were again widely scattered in Brazil yesterday, favoring parts of central/southeast Mato Grosso, southwest Goias, central/northeast Mato Grosso do Sul, central Minas Gerais, Sao Paulo, northern Parana, and southern/eastern Rio Grande do Sul.

While rain totals in guidance may be overstated, there remains good agreement on widespread coverage for the central belt in the next 10 days and the north in the 6 to 15 day. This will bring beneficial topsoil moisture for late corn/soy growth and driest coffee/sugar areas before storms focus back to the south in the 16 to 30 day. The lack of persistent rains in northwest soy areas will limit harvest delays next month.

Argentina showers lingered in mainly northeast Buenos Aires, southern Entre Rios, and northern Santa Fe yesterday. Showers should be limited to southern/western edges of the belt over the next 10 days but become more substantial in the 11 to 15 and 16 to 30 day. While near-term improvement is expected, the northeast 1/3 of corn/soy may need to still be watched for wet pockets next month.

FSU Wheat to Benefit From Significant Showers Next 10 Days. E. Ukraine and Russia wheat see the greatest totals (more than 1” possible), easing soil moisture deficits.

Morning Market Snapshot

 

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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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