Home Market Market Watch Morning Outlook

Morning Outlook



Overnight Highlights

·         A cease-fire has been agreed to for Ukraine beginning on Sunday, even as the International Monetary Fund offers $40 billion of aid for the war-stricken country.

·         Greece remains at a stalemate with its creditors, but that was over-shadowed overnight by the cease-fire news, as well as by another aggressive quantitative easing program by Sweden.

·         The euro rallied and the dollar turned lower overnight on the above, spurring a modest rally in the broader commodity sector, in which the grain and oilseed markets participated.

·         U.S. crude oil stocks are the largest on record for this time of year going back 80 years.

·         The Rosario Grains Exchange in Argentina pegged its soybean crop at 58 million metric tons, up from 54.5 mmt previously and up from USDA at 56 mmt. It’s corn production estimate rose to 23.5 mmt, up from 22.4 mmt previously and up from USDA at 23 mmt.

·         West Coast ports are expected to shut down again this weekend, further slowing cargo movement during the labor conflict.

·         The markets will be closed Monday for President’s Day, which increases risks for traders holding positions through the weekend amid rising global uncertainty.

·         Rains favor central Brazil near-term, but spread back to the north next week, slowing harvest activity and safrinha corn planting.

·         Next week’s winterkill threat for U.S. wheat limited to small areas lacking sufficient snow cover.

Commodity Weather Group Forecast

In the U.S., showers were minimal yesterday, with just localized .25” amounts in northwest parts of the TX Panhandle. The cold push this weekend in the Midwest only threatens a small area of southern OH. The more substantial cold surge for the Plains/Midwest/Delta next week is still not likely to lead to significant winterkill, as long as expected snow totals of 3 to 6” (locally 12”) next Tuesday verify in the Southern Plains, northern Delta, and southern Midwest.

There is still a risk for damage if the snow ends up lighter or more patchy, but impacted areas are likely to be limited. Increased shower activity for the Delta and Southern Plains over the next 2 weeks should begin to ease prolonged winter dryness prior to spring growth.

In South America, showers in central/northwest Brazil favored Mato Grosso do Sul, central/far southeast Mato Grosso, southwest/far northeast Sao Paulo, northwest Parana, and coastal southeastern areas yesterday. Rains will favor central areas in the near-term, expanding into the northwest after the holiday weekend.

This will slow soy harvest and safrinha corn seeding next week, but rains are forecast to shift back south in the 11 to 15 day and will be needed to recharge moisture in recently drier patches across Rio Grande do Sul.  Rains may scatter back north later in the 16 to 30 day, but odds of a notably wet pattern that would threaten fieldwork are low. The northern 1/2 of the coffee belt will likely see moisture supplies slip again, but sugar should pick up widespread follow-up rain in the next 10 days.

Argentina remains mostly dry in the near-term, with showers then increasing in the west and scattering into central corn/soy areas from Monday to Wednesday. However, the wettest weather still arrives in the 11 to 15 day, limiting any dry patches to only 10% of the belt in the southeast.

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.




or 1-866-249-2528




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.

The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. This message may be an attorney-client communication and/or work product and as such is privileged and confidential. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail, and delete the original message. Water Street Solutions is an equal opportunity provider. Water Street Solutions is an equal opportunity employer.