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Morning Outlook



Overnight Highlights

·         The Department of Labor is scheduled to release its highly-anticipated monthly jobs report at 7:30 a.m. CST this morning, with possible implications for the currency markets. Wall Street expects the report to show that the economy created 240K jobs in February with unemployment dropping to 5.6%.

·         The dollar is strong again this morning, posting new 11-year highs and its highest against the euro since 2003, but this may very well be its last hurrah before a more choppy pattern in the months ahead.

·         An official think-tank suggests that China may be about to sell four processors 48 to 55 million bushels of soybeans from its reserves before restocking them with Brazilian supplies.

·         Ukraine is expected to send a delegation to China next month to negotiate a deal to double its corn shipments after sending 40 million bushels to China in 2014.

·         Corn futures pulled back from the top of a chart wedge formation overnight, while soybeans and wheat posted a modest bounce.

·         Northwestern Brazil was drier yesterday, but showers start to return this weekend to slow fieldwork once again.

·         Rains in the 6- to 10-day period are expected to keep U.S. Delta corn and wheat areas excessively wet.

Commodity Weather Group Forecast

In the U.S., a band of rain/snow (.25 to .75”) lingered in much of the southern Delta/Southeast yesterday. While 1 to 5 day rains focus south/east of the very wet areas in the Delta/southeast Midwest, warm temperatures will melt the 4 to 12”+ snow band in the southern OH Valley next week. This will keep standing water issues a concern for wheat areas.

Another rain event in the latter half of the 6 to 10 day will add to the wetness in the Delta and southeast Midwest, with additional localized flooding. Rains in the 11 to 15 day spare most of the wettest areas but keep the Delta wet enough to delay early corn planting. Plains wheat rain potential diminished and could begin to hamper early growth later in the month, mainly in OK/TX.

In South America, scattered showers were more limited in northwest Brazil yesterday and focused on central areas, favoring eastern Mato Grosso do Sul, northwest Goias, northwest Mato Grosso, southern Sao Paulo, and Parana. Showers will be similar for another 2 days but start expanding into the northwest again by late in the weekend and remain active through the 6 to 15 day.

This will still limit any recovery from current safrinha corn seeding delays in Mato Grosso but will aid moisture supplies. Central harvest areas and ports will see occasional showers but do not appear excessively wet, and coffee/sugar rain chances remain quite good.

Argentina will see limited showers allow flooded areas in the northwest corner of the corn belt to drain over the next week, but a return of rains is then expected late in the 6 to 10 day and particularly in the 11 to 15 day. This will keep early corn harvest slow in Santa Fe/Cordoba, but the showers will aid soy growth. The 16 to 30 day guidance trended wetter in Argentina (particularly late in the period) and was not as wet in Brazil today.

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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