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Morning Outlook



Overnight Highlights

·         The European Central Bank begins its 1.1 trillion-euro asset purchasing plan, but economists are already saying that it will likely need to be expanded.

·         The euro dropped on the imminent start to Europe’s 1.1 trillion-euro stimulus program.

·         The dollar surged to new 11-year highs overnight as the euro dropped on the weaker euro, on data showing that services growth fell short of estimates in Europe and after India joined the group of countries cutting interest rates this year.

·         Crude oil posted modest gains overnight, but much of the rest of the commodity sector turned lower on the stronger dollar.

·         ADP reports that the private sector added 212K jobs in February, down from pre-report estimates of 219K. The Department of Labor will release its monthly jobs report on Friday morning.

·         Some areas of the safrinha corn belt are missing out on this week’s rains.

·         Those rains are expected to ease a bit into the weekend, before intensifying again in the 6- to 15-day period to keep delays in place.

·         Showers are limited in Argentina until late in the 6- to 10-day period, allowing fields to favorably dry out.

·         More snow falls in the southern Midwest today, but next week’s melting could cause localized flooding.

·         Just a handful of roads remained blocked by truckers in Brazil.

·         A three-day farm strike in Argentina starting next Wednesday should have little impact on U.S. exports unless it extends considerably longer.

Commodity Weather Group Forecast

In the U.S., a band of rain (.25 to 1.25”, locally 2”) fell in the southeast Midwest/northern Delta yesterday, leading to localized flooding in the OH Valley. There was also snow (1 to 5”) in SD, MN, northern IL, southern WI, and MI. Rain changes to snow today in the southeast Plains, Delta, and southeast Midwest (.25 to 1”, locally 2”), with a band of 3 to 10” along and just south of the OH River.

Soil moisture will be abundant for soft wheat growth once warming sets in next week, which could lead to some more localized flooding from snow melt. Sub-0°F readings in the eastern Midwest on Friday morning do not look damaging, given today’s snow event. Plains wheat is drier in the next 2 weeks, but rain chances improve in the 16 to 30 day.

In South America, Brazil thundershowers favored northern/western Mato Grosso, far northern Mato Grosso do Sul, central/southwest Goias, and southwest Rio Grande do Sul, with light showers also noted in western Parana and Espirito Santo/far northeast Minas Gerais. Rains will still briefly diminish a bit by the weekend in northwest corn/soy areas, but frequent rains still limit any recovery in late corn seeding for Mato Grosso in the 6 to 15 day and threaten output this season.

Rains will also slow soy harvest and threaten port delays in central areas, particularly this weekend and in the 11 to 15 day. Coffee/sugar areas will see widespread rain next week aid moisture.

Thundershowers favored Santiago del Estero, far northeast Cordoba, central Santa Fe, Entre Rios, and far northeast Buenos Aires yesterday, filling in most remaining dry spots in the east but causing further wetness issues for early corn harvest in Cordoba/Santa Fe. However, the outlook going forward is not as wet today, with the next chance for notable rain late in the 6 to 10 day. This should keep flooding concerns minor.

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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