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Morning Outlook



Overnight Highlights

·         European officials are losing their patience with Greece after it tried an end-around to get aid without meeting requirements to qualify for it.

·         The dollar dropped to three-week lows overnight before recovering this morning.

·         The International Grains Council boosted its 2015-16 global corn production estimate by 10 million metric tons or 400 million bushels to 951 mmt, although that is still below the record 994 mmt seen last year.

·         Argentina’s Ag Minister boosted that country’s soybean production estimate to a record 59 mmt, up from 54 mmt previously and up from USDA’s recently revised estimate of 57 mmt.

·         Officials note that the Brazil truckers strike produced 17 road blockages, mainly disrupting corn and soybean transportation, but that is far below the more than 100 blockages seen in February.

·         Daily trading limits for corn futures rise to 30 cents per bushel on April 30 for the May 1 trading session, up from 25 cents currently. The daily limit remains unchanged at 70 cents for soybeans. The limit rises to 40 cents for Chicago wheat, where it will also remain for KC wheat.

·         Corn futures slip below key areas of chart support overnight as bird flu spreads and as the weather outlook opens up for active planting in the Midwest next week.

·         Welcome rains are expected in the Southern Plains, primarily on Monday.

·         The new-crop soybean/corn price ratio rose to 2.45 to 1 overnight, as the market works to buy more soybean acres amid rising global surpluses.

Commodity Weather Group Forecast

In the U.S., widely scattered light showers occurred in central/southeast ND, central MN, central/northeast SD, southwest NE, northwest KS, far eastern CO, central TX, northern MS, and southeast LA yesterday. Low 20s were limited to eastern MI this morning, with upper 20s elsewhere around the Great Lakes and light frost farther south. No wheat damage of note is expected, and temperatures now moderate.

Showers favor the central Midwest from later today into early Sunday. However, drier/warming weather for all of next week then aids seeding progress, with interruptions returning in the 11 to 15 day. Delta rains also diminish for at least a week starting on Wednesday to ease wet spots. 16 to 30 day rain interruptions are most likely in the Delta.

Plains showers will scatter across mainly eastern areas overnight, but good coverage of the south occurs on Monday. This should narrow the remaining dry spots in the southwest (currently 20% of winter wheat), with 11 to 15 day rains also reaching about 3/4 of the belt. May showers appear likely to support good yield potential. Occasional minor planting delays are possible in the Northern Plains/Canadian Prairies, but spring wheat germination prospects will benefit.

In South America, rain (.50 to 2”, locally 3.5”) scattered across the northern 1/3 of Brazil corn/coffee yesterday. Rains remain similar for much of the next 10 days, with only spotty showers farther south. Soil moisture declines in the southern 1/2 of safrinha corn should not be damaging given recent rains, but rains will need to return in early May. Coffee areas should see enough rains still to ease stress. Sugarcane/soybean harvest will see only minor delays in the next 10 days.

Argentina remains dry in the next 5 days to aid harvest, with scattered showers briefly slowing progress later next week.

Wetter pattern expected to ease NW Europe dryness next 2 weeks, aiding wheat growth. Scattered showers this weekend will begin to benefit dry areas in U.K., N. France, and northern Germany. Follow-up rain in the rest of the 2-week period is likely and will be needed to recharge low soil moisture for wheat/rapeseed.

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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