Home Market Market Watch Sunday Outlook

Sunday Outlook



Weekend Developments

·         Alexis Tsipras’s Syriza defeated the ruling party in elections today, according to exit polls, which could raise fears of instability in Europe. The Syriza party reportedly wants to challenge the austerity program currently in place, demanding aid from Europe without having to make the cuts in government spending.  

·         In essence, the Greek people are rejecting limited government spending, which could end up “accidentally” knocking them out of the euro-zone, with other destabilizing implications. Unemployment is near 50% in Greece.

·         Russian troops are said to be participating in a stepped up effort to claim territory in Eastern Ukraine, including the key port city of Mariupol on the Sea of Azov.

·         Central bank activism around the world sent the dollar exploding higher to an 11-year high this past week, leading fund managers to pull money out of the broader commodity sector.

·         The U.S. Federal Reserve will meet Tuesday and Wednesday of this week. Its policy statement to be released midday Wednesday could reinforce that move, or trigger a massive short-covering pull back to reverse that money flow.

·         Fundamentally, look to soybeans to be the leader, based on Brazilian harvest results as they increase in frequency over the next several weeks.

·         Weekend rains were generally as expected in Brazil, reaching much of Mato Grosso and surrounding areas. Showers linger early in the week, before focusing on central and southern areas for much of the next week.

·         A strong Arctic cold air mass is expected to sweep down across the Midwest next weekend, but snow both early and late this week should provide cover to reduce winterkill risks for wheat.

Commodity Weather Group Weekend Summary

In the U.S., early weekend showers covered the Southeast and extended into the OH Valley (.25 to 1.25”), with light showers currently crossing the Midwest (<.25”). Snow showers cross the northeast 1/2 of the Midwest early and late this week, increasing snow cover ahead of a potential strong cold push next weekend. This should protect wheat from winterkill, but additional cold pushes are possible in the 11 to 30 day that will need to be monitored.

The South should be mainly dry until late in the 6 to 10 day, ensuring that wet wheat fields drain favorably. Showers could extend into the S. Plains late this week but are likely to be light. Plains winterkill threats are minimal, as cold focuses to the east. Pacific Northwest wheat may see more beneficial 11 to 15 day showers.

In South America, scattered weekend showers have been no more than expected but have reached much of Mato Grosso, northern/western Goias, southwest Bahia, central/southeast Minas Gerais, and northwest Rio Grande do Sul. Showers linger early in the week in the north but focus on the central/south for much of the next week.

This should include sections of Parana/Sao Paulo/Mato Grosso do Sul that have missed much of the rain in the past week, but nearly the northeast 1/2 of coffee and about 15% of corn/soy in the north may still miss more notable showers for now. However, the 11 to 15 day has trended wetter, particularly for coffee areas. The rains are not expected to focus on soy harvest areas in the northwest.

Argentina picked up scattered weekend showers in the southwest. Rains will scatter into central/southeast corn/soy areas from Tuesday into Wednesday, but the outlook trended drier. Showers otherwise remain most frequent in the far north/west in the next 2 weeks, and this should offer a little better chance for the wettest fields in the heart of the belt to drain. Highs have only been peaking in the upper 80s to mid-90s, well below projections from the hot-biased GFS guidance.


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.