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Morning Outlook



Overnight Highlights

·         The Federal Reserve begins two days of meetings today to discuss possible changes to its monetary policy, with a revised policy statement expected to be released at 1 p.m. CDT Wednesday.

·         The dollar is modestly lower this morning as traders continue to trim their long (bought) positions ahead of the Fed’s revised policy statement.

·         Crude oil slipped to a new six-year low of $42.63 overnight on big supply fears as U.S. production remains strong despite a drop in exploration.

·         China has booked 23.6 million bushels of Ukrainian corn already this calendar year, with more deals expected in the weeks ahead.

·         South Korea’s largest feed group is tendering to buy 8.1 million bushels of corn and 2.5 million bushels of feed wheat.

·         Wheat prices are mixed this morning after slipping to new highs for the move overnight.

·         Corn and soybeans slipped modestly lower overnight on fears of eroding demand as Southern Hemisphere supplies rise.

·         Two rain systems are expected over the next 10 days for already wet areas of the Delta, adding to planting delays in the region.

·         This morning’s outlook is drier for parts of Texas, but wetter for Kansas wheat the next 10 days.

Commodity Weather Group Forecast

In the U.S., light showers were mostly limited to the far northern Plains near the Canadian border. Rains will expand from the S. Plains into the Deep South between Tuesday and Thursday, with a second system tracking even closer to the Gulf Coast to finish the week. 6 to 10 day showers then track from KS into the southwest Midwest and northern Delta early next week, with another disturbance from the N. Plains into the Midwest toward the end of the 10-day.

The mostly light showers will aid Plains wheat growth, with the most limited activity anticipated in NE and West TX. The showers may still short-change MN, but 6 to 10 day activity otherwise benefits pre-planting moisture in much of the Midwest. Similar to wetter trends in the next 10 days for the Delta will keep early corn seeding limited and limit drying for wet wheat fields, but the 11 to 15 day offers needed breaks. Pacific Northwest rain chances are limited in the next 10 days but are inching upward in the 11 to 15 day to offer some potentially favorable follow-up moisture ahead of spring growth.

In South America, showers (.25 to 1.5”, locally 3.5”) concentrated in Mato Grosso, Goias, and Sao Paulo in Brazil yesterday and continue to focus on the north this week but gradually taper off in the 6 to 15 day. The near-term rains will boost soil moisture reserves for second-crop corn, while the drier trends then aid soy harvest progress in the north. Rains also favor coffee/sugar in the next 2 weeks, keeping conditions favorable.

Argentina was dry yesterday. Showers this week will be confined to the far southwest and then are possible in the northwest in the 6 to 10 day, with drier conditions in the 11 to 15 day. Early corn harvest will benefit from the gradual drying. However, some areas in northern Buenos Aires could see moisture shortages hamper soy filling if rains in the 6 to 10 day fail to extend into that area, potentially impacting 15% of the national crop area.

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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