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Morning Outlook

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Overnight Highlights

·         The dollar consolidated below the 100-day moving average overnight, but above Thursday’s lows.

·         Crude oil pushed to new 4-1/2 month highs in quiet trading overnight.

·         Shipments remain halted at Argentina’s Rosario port due to strike’s. Crusher’s unions are said to be asking for 43% raises to pay, while crushers are offering 23%. The stevedores union is supporting the crushers’ unions.

·         Grain and oilseed prices consolidated just above Thursday’s lows overnight amid rapid planting progress and a focus on abundant global supplies.

·         Most areas of the Midwest remain dry until a band of rain sets up on Monday/Tuesday from Kansas to southwestern Michigan.

·         Broader coverage develops in the western Midwest by Thursday/Friday, gradually spreading east through the rest of the 6- to 10-day period.

·         Rains across much of Brazil’s safrinha corn area next week are expected to aid pollination, boosting production estimates.

·         Frequent rain chances are seen for the Plains winter wheat belt.

·         The Wheat Quality Council’s tour of Kansas and surrounding areas will be Monday through Thursday of next week, highlighting the poorest of this year’s winter wheat crop.

Commodity Weather Group Forecast

In the U.S., scattered and mostly very light showers occurred in mainly the eastern Dakotas, northern MN, southeast IN, central OH, central KY, northeast CO, and central NE yesterday. Widely scattered showers remain possible in the northwest Midwest into the weekend, but most areas remain dry until a band of rain sets up on Monday/Tuesday and favors KS, southern NE, IA, southeast MN, northern IL, northern IN, and southwest MI.

Broader coverage develops in the western Midwest by Thursday/Friday, gradually spreading eastward through the rest of the 6 to 10 day. This will begin to slow seeding in the Midwest/Delta after some huge near-term advances. The 11 to 15 day did inch wetter in the western Midwest, but the pattern remains less active than next week in the corn belt as a whole. The wettest weather in mid to late May should focus on the Delta, slowing soy/cotton seeding and possibly raising wheat quality concerns further.

Plains winter wheat areas will see abundant rain next week and into the 11 to 15 day in support of heading, with a favorably active 16 to 30 day as well. Spring wheat seeding will slow at times, but most of the N. Plains/Canada should maintain a normal or faster than average pace.

In South America, rain (.25 to 1.25”, locally 2.25”) remained confined to northern fringes of Brazil corn/coffee yesterday and remains so for the next 2 days, aiding soy/sugar harvest. Rains move from south to north early next week, with additional showers late next week helping to replenish diminishing moisture supplies from this week’s dry weather. This should ensure stable pollination. Mid-week rains benefit coffee but slow sugar harvest (damage is unlikely).

Argentine rains are just beginning to expand and stall corn/soy harvest over next 2 days. Dryness next week allows harvest to slowly recover.

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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