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Morning Outlook



Overnight Highlights

·         Mexico added Iowa to the list of states it will not accept poultry from after this week’s confirmation of avian flu there. Mexico accounts for roughly a quarter of U.S. poultry exports, giving it by far the largest portion of U.S. exports.

·         The rapid spread of avian flu is adding to the bearish tone in the corn and soybean pits on fears of lost demand for feed and protein.

·         Crude oil pulled back after Saudi Arabia suspended military action in Yemen, but the charts suggest more upside potential.

·         Corn futures were weaker again overnight, consolidating just above key chart support as traders worry about surplus supplies and waning demand.

·         Soybeans turned lower overnight after struggling to sustain a rally.

·         Wheat is one-cent higher this morning as the market continues an anemic bounce following this month’s collapse as traders measure weak demand against Plains production problems.

·         Intermittent rains and cool temperatures will keep planting progress slow near-term, but the wettest period looks to be in the 11- to 15-day period.

·         Rain delays for the Argentine harvest hold off until the 11- to 15-day period.

·         Plains wheat has multiple chances of beneficial showers over the next week.

·         March cattle placements are seen down 5.5% from year ago levels in Friday’s USDA cattle-on-feed report, with on-feed numbers down 1.4%.

Commodity Weather Group Forecast

In the U.S., a few light showers were noted in northeast parts of the TX Panhandle, northwest OK, northeast TX, far northern LA, southern MO, western KY, far southeast KS, east-central IL, central/southeast IN, and central/southwest OH yesterday.

Midwest showers are expected this weekend (south) and again next Wednesday/Thursday (central/southeast), but extensive activity holds off until late in the 11 to 15 day (favoring the west). Cool temperatures will slow some fieldwork, but limited showers should support decent seeding progress, with showers then slowing fieldwork but aiding moisture in the west during early to mid-May.

Delta rains will be relatively active during the next week. However, a drier balance of the 15-day period should ease wheat quality concerns and fieldwork delays before wetter 16 to 30 day trends return. Midwest frost chances in the next 10 days will be of little threat, as a damaging freeze remains unlikely to reach jointing wheat.

Plains wheat will benefit from multiple shower chances in the next week, with additional chances expected in May to keep moisture stress limited to 15% or less of the belt. Intermittent spring wheat showers will aid soil moisture and only threaten minor delays.

In South America, rain (.25 to 1.25”, locally 2”) benefited the south 1/3 of Brazil corn yesterday. Rains during the rest of the week focus on the northern of corn and then scatter across the region next week to aid pollination. Coffee areas see widespread rains in the next 10 days ease moisture stress but keep sugarcane harvest slow. Soy harvest delays are limited, as most rains remain north of the area.

Argentina rain (.25 to 1”) was limited to western fringes yesterday. Showers of note may hold off until the end of next week, allowing corn/soy harvest recovery before a wet 11 to 15 day could stall harvest.

Europe rain pattern becoming steadily more active next 10 Days, aiding wheat development. Showers develop in drier northwest wheat/rapeseed areas this weekend and then become more significant next week. Moisture deficits should ease throughout the area, averting moisture stress on the crops.

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

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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