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Morning Outlook



Overnight Highlights

·         The dollar surged to its highest level against foreign currencies since April 2013 overnight on reports that the European Central Bank’s bond buying program pushed yields on German 7-year bonds below zero.

·         German notes maturing in April 2018 were no longer eligible for purchase after yields dropped to -0.23%, exceeding the self-imposed limit of -0.20%.

·         A suspected case of avian influenza has been identified in an Arkansas poultry flock.

·         An Argentine farm strike starts today and continues through Friday.

·         Corn prices are attempting a breakout to the upside this morning after attempts to break lower Tuesday were thwarted by a USDA crop report showing declining domestic and global stocks.

·         Wheat finds support from short-covering this morning, spurred by concerns about drought in the Plains hard red winter wheat belt.

·         Soybeans garner support from a reduction in Brazil’s production estimate by CONAB.

·         Harvest is expected to be delayed by persistent rainfall in northwestern Brazil the next two weeks, but concerns are limited overall.

·         The U.S. Delta should be drier after Friday, allowing early corn planting to progress in the 6- to 15-day period.

Commodity Weather Group Forecast

In the U.S., rain (.25 to 1.5”) covered the eastern 1/2 of the Delta and southeast 1/4 of the Midwest yesterday. Showers return to the Delta/eastern Midwest Friday. After this event, showers are much more limited for the next 2 weeks and should allow some areas in the Delta to begin corn planting. Wet wheat fields will also have a chance to drain, minimizing damage from standing water.

Rain potential increases for C. Plains wheat in the 6 to 15 day, which would be timely for early spring growth that will be getting underway with the warmer pattern. S. Plains rain still looks limited. Moisture shortages persist, slowing early development (especially in OK). Colder Midwest 11 to 15 day trends are not strong enough to threaten wheat. A return of cooler/wetter weather in the 16 to 30 day for southern corn areas still appears likely to slow early seeding.

In South America, scattered showers occurred in central/southern Mato Grosso, Goias, central/southern Minas Gerais, far northern Sao Paulo, and a few spots in Parana yesterday. A similar pattern prevails through much of the next 10 days. Showers are then expected to be more limited in central areas in the 11 to 15 day but fill in for both northern and southern areas. Minor interruptions to fieldwork will focus on Mato Grosso/Goias over the next 2 weeks. Moisture will remain favorable for safrinha corn, coffee, and sugar growth.

Showers will scatter into central/far southern Argentina by Friday/Saturday, with more extensive rain chances by late next week and into the 11 to 15 day. However, the wettest weather may focus south of excessively wet areas in central/northeast Cordoba and central Santa Fe, particularly in the next 10 days. This will help to limit additional flooding issues, although early corn harvest may still struggle in the north.

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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