Home Market Market Watch Morning Outlook

Morning Outlook



Overnight Highlights

·         Russia’s President Putin held a news conference overnight, blaming low oil prices and the West’s sanctions for their current crisis and asking its citizens to brace for things to possibly get worse for the next couple years.

·         Stock futures suggest another big up day in the equity markets today after the Federal Reserve appeared to take a more dovish stance supporting ongoing stimulus late Wednesday.

·         The dollar is poised just below the March 2009 highs, with energy prices modestly higher this morning.

·         The CME Group finally acted to raise daily trading limits for Feeder cattle to $4.50 per cwt, with expansion to $6.75 per cwt the following session if one or more contracts within the first two settle at the limit. Regular limits continue for live cattle, but expanded limits to $4.50 following the first day of limit trade are now possible.

·         Corn futures broke higher out of a bull flag on the charts overnight, with March trading to a new five-month high.

·         A South Korean feed group is tendering to buy 5.5 million bushels of corn for April 15 arrival.

·         Wheat futures continue to press higher on confirmation from Russian leaders of export restrictions, winterkill threats for the Plains and hopes for increased sales to Cuba, with Chicago March pulling back at the June 9 high.

·         Overnight reports suggest that Ukraine is poised to fill much of the gap of lower Russian shipments. U.S. wheat traders are pessimistic that our wheat will pick up much of the lost business, suggesting that this market has a lot of air beneath it.

·         Switzerland placed a fee on deposits overnight, wary of a flood of deposits fleeing Russia.

·         Soymeal saw follow-through buying overnight after holding an area of support just above $350 on Wednesday.

·         An active weather pattern is expected to replenish moisture in southern and central areas of Brazil’s corn/soybean belt over the next two weeks, keeping yield prospects high.

·         Forecast models are adding more snow to the outlook for the Central Plains, limiting the winterkill threat.

·         USDA is expected to release a portion of its 10-year baseline projections this morning. These projections are known for projecting whatever the status quo is at the time.

·         Current-year soybean sales for the week ending December 11 dropped to just 25.6 million bushels in this morning’s report, with corn sales at 27.3 and wheat better at 17.5 million bushels.

Commodity Weather Group Forecast

In the U.S., showers yesterday (.10 to .75”) favored E. Plains and N. Delta. A new surge of showers will cross the S. Delta and Southeast tomorrow/Saturday. Another mainly rain event crosses the Midwest/Delta/Southeast the middle of next week.

But the main storm of interest comes on Christmas day to the C. Plains. That system could produce significant snowfall and would help to protect the wheat crop as a strong cold air outbreak is still capable of producing sub-zero readings at the end of next week. This will keep damage threats rated low for now.

The Delta could see some locally heavy rains from that storm as well but given the limited rains in all but the far south this week in the belt the damage threat remains minimal. Southeast rains also remain at favorable levels for slow wheat growth. Pacific NW wheat sees more needed showers this week.

In South America, rains favored C. Mato Grosso, C. & S. MGDS, S. Goias, and Bahia in Brazil yesterday. Thundershowers linger over MGDS/Parana the next 2 days replenishing low soil moisture. A strong cold front crosses S. & C. belt late weekend into first half of next week. Substantial rains should eliminate moisture deficits for corn/soy.

The south dries out in 6-10 day but rains return in 11-15 day keeping moisture favorable for all crops. Only the far northeast is likely to remain dry during the 6-15 day period but extended outlooks for the 16-30 day still support a return of rains before moisture stress would develop in soybean and coffee areas.

Argentine rains will return early this weekend and still hold a good potential to ease dryness in corn/soy areas of S. Cordoba. Dryness next week aids wheat harvest recovery. Showers late next week slow wheat harvest again but give the drier corn/soy areas in the west a chance for needed moisture.

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.




or 1-866-249-2528




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.

The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s) named above. This message may be an attorney-client communication and/or work product and as such is privileged and confidential. If the reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail, and delete the original message. Water Street Solutions is an equal opportunity provider. Water Street Solutions is an equal opportunity employer.