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Morning Outlook

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Overnight Highlights

·         Greece is scrambling to find 2 billion euros to make debt payments due on Friday.

·         The dollar traded more than a 3,000 point spread as it collapsed following Wednesday’s release of the latest Fed statement that opened the door for a rate hike, but then took a dovish take on the economy.

·         The dollar has traded more than a 2,000 point range overnight, erasing much of the original losses.

·         Crude oil gave back much of Wednesday’s late gains as the focus shifts back to burdensome supplies.

·         Grain and oilseed prices continue to hold onto modest gains, but are near session lows as early gains have nearly evaporated as the dollar has rallied from its lows.

·         Weekend rains are expected to slow planting progress in the South, but the region should see some breaks next week.

·         Spotty relief is seen for dry areas of the Southern Plains the next two days, with limited moisture in the remainder of the 15-day period.

·         Argentine rains are expected to be too light to hamper early corn/soybean harvest progress.

·         Trade sources say that China has purchased 16.5 million bushels of high-protein wheat in recent days; 11 million from Canada and the remainder from Australia. That follows a purchase of 4.2 million bushels of U.S. hard red spring wheat last week. The demand for bread made with high-protein wheat is rising in China as incomes rise.

·         USDA will release export sales totals for the week ending March 12 at 7:30 a.m. CDT this morning.

Commodity Weather Group Forecast

In the U.S., rains scattered from the far southeast Plains into the Delta/southwest Midwest. Favored areas included parts of central MO, eastern AR, northwest MS, far northern LA, and far eastern TX.

Showers will scatter across the S. Plains in the next 24 hours, but relief is likely to remain spotty. Weak disturbances do bring a few patchy 6 to 15 day showers to the Plains, but more notable rains will remain needed in April to recharge topsoil moisture and support wheat growth in OK/NE/KS (which will be spurred by occasional warmth).

Weekend rains will be significant in the southern Delta, slowing early corn seeding. However, rain chances next week are short-lived, and some fieldwork occurs. Wet wheat areas in the northern Delta are seeing only very light showers this week and should not be wet enough next week to exacerbate concerns. However, a more active storm track is still expected to return in April that will need to be watched in the OH Valley/Delta for wetness. Pacific Northwest wheat areas will see light showers possible to start next week but otherwise limited rain into early April..

In South America, showers (.25 to 1.5”, locally 2.5”) in Brazil favored Mato Grosso, Minas Gerais, Goias, and Sao Paulo yesterday. Showers gradually contract from corn/soy areas to northeast coffee areas in the next 5 days. Showers return to southern corn/soy areas next week and spread north in the 11 to 15 day. The break in rains this weekend into next week should aid soy harvest. The return of rains to much of the corn belt in the 11 to 15 day should keep second-crop corn well-supplied with moisture.

Argentina showers (.25 to 1”) were confined to the southwest corner of the corn/soy belt yesterday. Showers this week will be confined to the western 1/3 but scatter across the belt next week. The light rains may benefit late soy filling in northern Buenos Aires but should not significantly impact early corn/soy harvest progress.

Rains Remain Limited in Russia Wheat Next 2 Weeks, as Spring Growth Slowly Gets Underway. Showers over the next two weeks will favor far S. Russia and southern/western Ukraine, aiding early vegetative growth. A lack of showers in the rest of Russia is not an immediate threat but could hamper early growth when it begins in April.

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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