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Morning Outlook



Overnight Highlights

·         Manufacturing activity slipped to an 11-month low in China as orders for new products dropped.

·         Greece Prime Minister Tsipras will meet with other creditors in Berlin today after having a frank, but cordial, meeting with German Chancellor Merkel on Monday.

·         The dollar is down for the third straight session this morning, probing below key support at last Wednesday’s low. How it closes today could say a great deal about where we go from here.

·         Crude oil saw follow-through buying in the face of a plethora of bearish news in recent days, rising to its highest level since March 12 overnight as the dollar slides, although it is now slipping from those modest gains.

·         Grain and oilseed prices posted modest losses on general weakness in the broader commodity sector, with wheat seeing the greatest losses on improved rain prospects for dry production areas of the Northern Hemisphere.

·         Chinese imports of Ukrainian corn in January and February totaled nearly 41 million bushels, which is more than five times shipments in the same period last year.

·         Plains’ states releasing crop ratings indicated stable to better conditions following last week’s showers in the region, with the best conditions in Texas, declining as they go north.

·         The 6- to 10-day period has trended wetter again for the Delta, which will again slow corn seeding in the region.

·         Brazilian safrinha corn is likely to see needed rains later this week.

·         Rain potential improves for Russian wheat next week.

Commodity Weather Group Forecast

In the U.S., light to moderate snow (locally 10” or more) occurred yesterday from southern WI into northeast IL, with lighter totals stretching into central OH. Rains otherwise favored northwest MO and a few spots along the NE/KS border, although scattered showers also occurred in the Pacific Northwest.

Rains will favor the southern Midwest into Thursday, with the most notable 6 to 10 day rains shifting into the Deep South. Favored areas focus on the southern Midwest/northern Delta in the 11 to 15 day. The 6 to 15 day rains will slow early corn seeding in the South, with wet wheat areas in the northern Delta also seeing possible concerns return in early April. Occasional light showers will aid pre-planting moisture in the northern Midwest, with the far northwest struggling most to see deficits ease.

Relief for Plains wheat remains patchy (with near to above normal temperatures), although the GFS does attempt to head wetter in the 11 to 15 day. Pacific Northwest wheat is seeing current showers help to keep crops stable for now, although the region does dry out again in the next 2 weeks.

In South America, showers (.25 to 1.5”, locally 5”) in Brazil favored central Mato Grosso, Minas Gerais, western Goias, and Bahia yesterday. Showers are tapering off in the northeast for the rest of this week but pick up in the west late in the week and again at the middle of next week. The GFS limits the rains in the southern 1/3 of the safrinha corn, but other models still support rains that are needed, especially in Parana.

The dryness has aided the main soy harvest, with only minor delays expected from the upturn in rains in the next 10 days. The 16 to 30 day rains were scaled back but are mainly sufficient for corn pollination.

Light rains were confined to far southwest Argentina yesterday, with more light showers in the next 3 days. Drier conditions will then aid early corn/soy harvest but hamper late soy filling in 15% of the belt.

Rains Potentially Increase for Much of FSU Next Week; Only NE 1/3 of Russia Still Not Favored. Wheat areas in N. Africa/southwest Europe have benefit from rains. The rains expand across Europe/Ukraine over the next week to provide timely moisture for early wheat growth, and prospects improved for much of Russia next week.

China Wheat Likely to Pick Up Beneficial Rains Through Belt in 6-15 Day. Most models support extensive showers next week across the wheat belt, including the drier northern areas. There is also more support for additional rains in the wheat belt early in the 11 to 15 day that could enhance early wheat growth.

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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