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Morning Outlook

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Overnight Highlights

·         The dollar saw modest follow-through selling overnight on strength in the euro after European Central Bank Chair Mario Draghi made comments Wednesday both committed to the future of Greece and to continued stimulus for the euro-zone region.

·         The dollar added to those losses after the release of U.S. housing and jobless claims data this morning.

·         Crude oil consolidated lower in profit taking after surging to new highs for the year Wednesday on data suggesting that production and demand may be moving closer to being in balance, even though the size of the current surplus remains at record highs.

·         Export sales for the week ending April 9 included 24.3 million bushels of corn (soft), 19.8 million bushels of soybeans (seasonally solid), 4.9 million bushels of grain sorghum (good) and 5.9 million bushels of wheat (very poor).

·         Weekend rains are expected to benefit dry soils in the western Midwest, while Delta rains add to fieldwork delays.

·         Isolated storms have begun to develop in dry areas of the Plains. Those storms are expected to expand into Saturday with a slow-moving system, providing substantial moisture to the region.

·         Rains are expected to end in Argentina and southern Brazil early next week, allowing harvest to resume, while rains further north continue to benefit safrinha corn.

·         Grain and oilseed prices are generally steady to firm amid the weaker dollar.

Commodity Weather Group Forecast

In the U.S., scattered showers occurred in the Southeast/northern Delta/central and southwest Plains/central and far western Midwest/Gulf Coast yesterday, favoring west-central IN/western TN/southwest GA/SC. Showers gradually expand into the weekend, filling in across the Plains wheat and Midwest/Delta corn/wheat.

The rains will be heaviest in the C. Plains/central Midwest/southern Delta, but flooding remains localized. The moisture will aid Midwest pre-planting conditions. While showers will occasionally interrupt seeding in the southern Midwest, the main areas to encounter fieldwork delays and potential quality concerns for soft wheat will be in the Delta/far southern Midwest during the rest of the month.

Cool temperatures will slow drying behind the weekend rain event in the Midwest. Another cool shot in the 11 to 15 day is unlikely to be strong enough to threaten wheat damage, and guidance is less aggressive with the cold in the western Plains. The moisture in the next few days will aid most jointing/early heading wheat in the Plains, with additional chances late in the 6 to 10 day and again late in the 11 to 15 day to favor the C. Plains. The 16 to 30 day trended slightly wetter in both the C. Plains and central Midwest.

In South America, showers (.25 to 1”, locally 2”) fell across the Brazil corn belt yesterday and remain active for at least the next 10 days, building up good moisture reserves for upcoming pollination. Brazil soy harvest rain delays continue through the weekend, but trends are drier next week to keep delays limited. Rains expand in coffee areas later next week to ease stress but will slow sugarcane harvest. Rains in sugarcane areas taper off in the 11 to 15 day, easing damage threats.

Argentina rains (.25 to .75”) fell across the west ½ of the corn/soy yesterday. Rains cover the area in the next 2 days, with a few more showers early next week but mainly dry 6 to 15 day conditions that should allow corn/soy harvest to resume.

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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