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Morning Outlook



Overnight Highlights

·         Ukraine’s central bank raised its key interest rate to 30% overnight, up from 19.5% previously, trying to stabilize its currency and control inflation pressure.

·         The U.S. dollar pulled back overnight from yesterday’s 11-year high, before rallying to a new high this morning. Yet, commodities remain modestly firm early this morning.

·         Kansas wheat rated 44% Good to Excellent in data released late Monday, down 2 points from the previous month. Illinois wheat is rated 47% G/E, also down 2 points on the month. Otherwise, most other states that released monthly ratings saw conditions mixed to a bit better from the previous month.

·         Truck blockades in Brazil on Monday were roughly one-fourth of the level seen the previous week, allowing more soybeans to move to port.

·         Thunderstorms favored southwest Mato Grosso and northern Mato Grosso do Sul on Monday, slowing soybean harvest and safrinha corn planting.

·         Scattered showers continue in northwest Brazil the next few days, gradually diminishing by Friday shifting to central areas of the belt.

·         Rains surge back into northern areas next week, slowing field work once again.

·         Grain and oilseed prices pulled back from their modest gains early this morning as U.S. trading desks began to open and as crude oil pulled back on a strong dollar.

Commodity Weather Group Forecast

In the U.S., light snow (1 to 3”) fell in the central Midwest overnight, with light rain in the central Delta (.10 to .50”). A mix of snow/ice crosses the northern Midwest today (.10 to .50”), while the southeast Plains, Delta, and southeast Midwest see a wintry mix tomorrow (.50 to 1.5”, locally 3”) and a snow band in the northern Delta/far southeast Midwest (2 to 8”).

The moisture will aid Delta wheat prospects, and limited rains in the 6 to 10 day keep wetness risks minimal. There will be a cold push with sub-0°F readings in the eastern Midwest on Friday morning, but snow cover should still protect the crop. Showers in the 11 to 15 day period benefit the C. Plains/Midwest wheat and would improve pre-planting moisture in the northwest Midwest.

In South America, Brazil thundershowers favored southwest Mato Grosso and northern Mato Grosso do Sul yesterday. Scattered showers continue in the northwest and far south in the next few days, gradually diminishing by Friday and shifting focus to central areas to finish the week. However, rains surge back into northern Brazil after the weekend, keeping opportunities for improved safrinha corn seeding short-lived in Mato Grosso and elevating odds for reduced output.

Rains are projected to return to the central belt in the 11 to 15 day, slowing soy harvest and causing some port delays. Coffee/sugar prospects remain favorable.

Argentina picked up showers in mainly southeast/far northern Cordoba, central/southern Santa Fe, and southern Santiago del Estero overnight, with locally heavy rains today stretching through northeast Cordoba/central Santa Fe/Entre Rios. This will threaten some additional flooding near the Cordoba/Santa Fe border. Model agreement is very poor in the 6 to 15 day, but occasional rain chances will most likely keep early corn harvest slow in Cordoba/Santa Fe.

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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