Home Market Market Watch Sunday Outlook

Sunday Outlook



Weekend Developments

·         Two shippers suspended cargo loading on the west coast for this weekend, frustrated with union workers they believed were slowing work during the current contract dispute. It was the first shutdown since 2002.

·         Greece is seeking a bridge agreement with its creditors until June to avoid default while working on a longer-term agreement, but it is questionable whether it will be granted such an agreement.

·         Without such agreement, Greece could be just weeks away from default, and possible separation from the euro-zone. It’s debt stands at $362 billion or 175% of GDP. The showdown meeting with its EU partners comes Wednesday, with possible big implications for the currency market, although the critical vote may not come until the 16th.

·         Russia’s President Putin’s comments had a defiant tone after talks with Germany and France to resolve the Ukrainian conflict broke down over the weekend.

·         USDA will update its domestic and global supply and demand estimates with its crop report on Tuesday of this week.

·         The trade expects USDA to add about 10 million bushels to this year’s corn supplies, while reducing soybean stocks by a similar amount.

·         USDA will release its annual 10-year outlook balance sheets on Wednesday.

·         Grain and oilseed prices will continue to be susceptible to influence from the currency and energy markets, as they were last week.

·         Barring that influence, soybean business is shifting south of the equator as harvest momentum picks up, with a greater focus on rising supplies.

·         Rains were substantial in northern Brazil over the weekend, but they now shift south to aid pod filling while allowing harvest to resume in northern areas.

·         Corn showed strength when crude oil rallied and finished stronger on the week, but it’s more than likely destined for a broad sideways trading range short-term, particularly if safrinha corn planting continues to make necessary progress in Brazil.

·         Wheat found support last week from hopes that Egypt will use a $100 million grant to purchase U.S. supplies, but traders will get discouraged if it doesn’t happen soon.

·         Friday’s CFTC report showed that the funds still hold large short (sold) wheat positions as of February 3, while reducing long (bought) corn positions and short soybean positions.

Commodity Weather Group Weekend Summary

In the U.S., weekend showers were mainly confined to the Pacific Northwest wheat (.10 to .50”, locally 1.5”) and continue today before ending. Moisture levels are still on the low side but not immediately threatening, as crop growth is minimal. Dryness dominates Midwest wheat in the next 2 weeks. Cold surges starting late this week, but only areas in northern OH/IN that lose snow cover today would be at marginal risk for winterkill.

The Delta has a chance for showers later in the 6 to 10 and into the 11 to 15 day that is needed to rebuild low soil moisture for spring growth. Plains wheat is likely to remain mostly dry over the next two weeks, keeping soil moisture shortages in place in mainly OK. Cold surges remain east of the Plains, limiting winterkill risks there.

In South America, weekend rains were substantial in northern Brazil, reaching much of Mato Grosso, central/northern Goias, central/northern Minas Gerais, Bahia, and Espirito Santo. Amounts averaged near 2” but locally were 4 to 6”. The rains are beginning to diminish and shift to the south and eventually central areas in the next 10 days. This will allow soy harvest and safrinha corn seeding to improve in the northwest, with the next chance for more notable interruptions in the 11 to 15 day.

The rains have aided growth, with the return of showers to southern soy maintaining very good conditions this week. However, there are still patches in about 20% of the coffee/sugar that have been short-changed, with 11 to 15 day relief possible for sugar areas in Sao Paulo but drier coffee areas to the north possibly still missing out.

Argentina rains have scattered across the west this weekend but expand eastward early this week into the heart of the belt. Showers will be focused on the west in the rest of the 15-day outlook, although occasional scattered activity may still occur in the central belt. The southeast 10 to 15% of the corn/soy (central/southern Buenos Aires) should be the only spots at risk for stress.


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.