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Morning Outlook



Overnight Highlights

·         The bulk of the Midwest was again above freezing this morning for the second consecutive day as the region captures a taste of spring.

·         Showers were moving up from the Delta into the eastern Midwest, slowing fieldwork in the South and threatening wheat with persistent wetness. The Delta should see some drying after Friday.

·         The dollar pushed nearly 900 points higher overnight to new 11-year highs as Greece returns to the front of the concern list for traders.

·         European Central Bank Chair Mario Draghi ramped up pressure on Greece, demanding that it open up its books to disclose cash positions if it ever wants to receive more aid.

·         Euro-area national central banks are said to have purchased bonds as part of their bond-buying program at negative yields early today.

·         Commodity and equity prices tumbled around the world overnight as fears over global economic concerns rise again.

·         Grain and oilseed prices came under pressure as well, with traders cautious ahead of today’s USDA crop report (11 a.m. CDT) amid a rush of global investors to the relative safety of the U.S. dollar and government securities.

·         CONAB, Brazil’s equivalent of our USDA, cut its soybean crop estimate to 93.3 million metric tons this morning, down from 94.6 mmt previously. It cut soybean exports to 46.8 mmt, down 1mmt or 37 million bushels from the previous month.

·         CONAB pegged corn production at 78.2 mmt, down from 78.4 mmt previously, but this is still a high estimate.

·         Pre-report estimates for key numbers in today’s USDA crop report are as follows:

South American Production







MMT of Production

USDA Report

    Pre-Report Estimates

Average Trade Estimate





Highest Trade Estimate





Lowest Trade Estimate





Previous USDA Estimate





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U.S. Ending Stocks





billions of bushels

USDA March Report

Average Trade Estimate




Highest Trade Estimate




Lowest Trade Estimate




Previous USDA Estimate




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Commodity Weather Group Forecast

In the U.S., rains (.25 to 1”) covered the Delta yesterday. Showers taper off in the Delta today and expand in the eastern Midwest. The next showers push into the Delta/eastern Midwest Friday, but drier weather then takes hold until late the following week. The drier weather should ease wetness in Delta wheat and may allow some early corn planting to begin later next week. However, showers likely return early in the 11 to 15 day, which will keep the planting pace slow.

The rains with that system could bring needed moisture to the Plains wheat, which would be timely as early growth gets underway due to warmer than normal temperatures in the next 10 days. Pacific Northwest wheat remains short of moisture for early spring growth.

In South America, scattered showers occurred in northern Brazil and southwest Argentina yesterday, favoring southwest Buenos Aires, central Minas Gerais, northern/western Sao Paulo, far northwest Mato Grosso do Sul, northern Parana, far southern Mato Grosso, and central/southwest Goias.

Showers will remain limited in Argentina this week but increase in the south/far west this weekend and then expand further from the middle of next week into the 11 to 15 day. The current drying is aiding excessively wet fields in central/northeast Cordoba and central Santa Fe (1/4 of corn/soy), but the projected rains may keep early corn harvest slow and raise wetness concerns again by late this month.

Northern Brazil will be favored for rain in the next 2 weeks. While soy harvest will be slowed in Mato Grosso/Goias, the rains will aid safrinha corn/coffee/sugar growth. Interruptions to fieldwork will be much more intermittent in central soy areas, and a weak system developing off the coast in the Atlantic should have limited impacts to ports after the next couple of days.

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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