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Morning Outlook

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Overnight Highlights

·         The dollar saw follow-through selling after posting a bearish reversal on Wednesday, but it rallied toward morning on negative economic data out of Europe.

·         Euro-area economic confidence dropped more than confidence, consumer prices fell the most in five years and unemployment unexpectedly rose in Germany, according to data released early this morning, suggesting that the European Central Bank will move closer to quantitative easing.

·         The weaker dollar supported broad-based buying in the commodity sector overnight.

·         Wheat garners strength from mounting evidence that troops are crossing the border from Russia into Ukraine and that artillery is being fired from the Russian side of the border.

·         Overnight forecast models were wetter for the northwestern Midwest and drier for northeastern areas over the next 10 days.

·         Dry areas of the northwestern Delta show better shower potential.

·         Weekly export sales data will be released this morning at 7:30 a.m. CDT.

Commodity Weather Group Forecast

In the U.S., locally heavy thundershowers favored southern/eastern NE, southeast SD, western IA, northwest MO, northeast CO, and parts of central KS in the past day. Frequent Midwest showers continue through Tuesday with a series of disturbances, favoring northeast KS, eastern NE, IA, southeast MN, and WI with the heaviest totals and localized flooding risks.

The outlook has shifted wetter in the Dakotas/MN and drier around the eastern Great Lakes. Showers then lift to the far northern Midwest for a few days but return with broader coverage from late in the 6 to 10 day into the 11 to 15 day due to a wetter trend in today’s forecast. The showers will keep moisture well-supplied for late corn/soy growth, and near to above normal temperatures (mostly upper 70s and 80s for highs) will also aid growth rates. However, there will be minor wetness issues in mainly NE, IA, and WI due to the frequent and occasionally heavy rainfall.

Rain chances this weekend have increased slightly for dry areas in southern MO, northern AR, and far western KY. While confidence is still somewhat limited, this would aid double-crop soy and late cotton growth in the northern Delta. Otherwise, limited showers will aid early harvest. There are still no early frost risks in the next 30 days.

While still not expected to be particularly heavy, the outlook has continued to inch wetter for saturated spring wheat areas near the Canadian border and into the far northern Plains this weekend and again late next week. This would cause additional interruptions to harvest, but the threat of further losses is limited. The 16 to 30 day does continue to trend less wet in the N. Plains/Canadian Prairies to limit harvest delays.

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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<![if !vml]><![endif]>Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

 

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