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Morning Outlook

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Overnight Highlights

·         The dollar is testing its April lows this morning as charts suggest additional weakness possible.

·         Soybeans see follow-through buying after USDA data shows planting off to a slow start at just 2%, while corn prices remain weak after that same data shows planting progress at 19% match expectations with active planting expected this week.

·         Fastest corn planting progress is in the northwestern Midwest, where rains have fallen short.

·         Soft red winter wheat ratings were good in Monday afternoon’s data, while hard red winter wheat ratings continued to slide.

·         The Brazil truckers strike resulted in just two federal roads blocked at four points in Mato Grosso on Monday. The strike has never blocked more than 20 points on federal highways since it started on Thursday.

·         Avian flu was confirmed at five additional sites in Iowa impacting more than 6 million birds.

·         Corn prices set new six-month lows, but are finding support from soybeans this morning.

·         The planting window is wide open this week, but showers slowly return to the Midwest next week, mainly late in the week.

Commodity Weather Group Forecast

In the U.S., significant rains favored central/western OK, northern parts of the TX Panhandle, extreme southwest KS, central/southern LA, and far southern MS yesterday. Dry spots in parts of southwest KS/southeast CO encompass only 10% of the Plains winter wheat, and multiple rain chances in the 6 to 15 day (particularly at the middle of next week) aid heading.

The dry weather this week aids Midwest seeding notably, with showers in the southern Delta ending after today as well. Only very light showers may scatter into the far eastern Midwest by Thursday and the northwest Midwest Friday and this weekend. Showers return in the 6 to 10 day with a frontal passage across the Midwest early next week, but the wettest weather holds off until next Thursday/Friday and into the 11 to 15 day.

This will slow seeding, with rains also returning to the Delta at the end of the 10-day after a needed break. However, the Delta is still at most risk for a return of any wetness concerns in the 16 to 30 day. The Dakotas/MN may still tend to be short-changed on rain in the next 2 weeks, leaving the region most prone to slipping moisture but aiding seeding progress. Seeding interruptions should remain minor for Canadian spring wheat.

In South America, rain (.25 to 1”, locally 2”) focused on the northwest 1/4 of Brazil corn yesterday. Rains favor northwest fringes of the belt this week, aiding soy harvest in the south. Rains push across central/southern corn next weekend and enhance pollination. Rain chances have improved next week and may help to avert stress for filling coffee but slow sugarcane harvest.

Argentine rains return to the southern 1/3 tomorrow and cross the belt early this weekend, stalling corn/soy harvest. More showers occur in the northeast 1/4 late in the 6 to 10 day, but harvest recovers during a drier 11 to 15 day.

Wetter Pattern Next 10 Days to Benefit Wheat Across Nearly All of Europe and FSU. Rain (.25 to 1”, locally 2”) fell across central Europe wheat areas yesterday. Ongoing showers spread across the continent in the next 10 days, recharging low soil moisture levels in northwest Europe and improving South Russia as well.

Showers Cross China This Week, Benefitting Early Wheat Heading and Early Corn/Soy Germination. Rain (.25 to .50”) fell in the eastern N. China Plain yesterday. Rains scatter across most areas late this week, keeping moisture adequate. Drier 6 to 15 day conditions draw down moisture and could hamper late wheat heading in mid-May.

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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