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Morning Outlook

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Overnight Highlights

·         The European Central Bank raised the limit on emergency liquidity available to Greek banks by 1.4 billion to 76.9 billion euros after raising it by a similar amount last week. The ECB signaled that future increases will be more difficult as long as bailout talks are at a standstill and that it is working on ways to rein in funding of the banks.

·         The U.S. Federal Reserve concludes two days of meetings with a policy statement release at 1 p.m. CDT today that could impact money flow in or out of the broader commodity complex along with changes in the value of the dollar.

·         The dollar slipped to new lows overnight in quiet trade as traders wait for the wording of today’s Fed monetary statement.

·         Wheat saw follow-through buying overnight after reversing from a third day of sharp losses on Tuesday amid a weakening dollar.

·         The rebound in wheat prices supported strength in corn as well after prices held support at Tuesday’s low.

·         Soybean prices consolidated near Tuesday’s close as traders assess tight cash supplies against big South American supplies and increasing U.S. acreage.

·         Substantial planting progress is expected in the next week due to open weather over most of the Midwest.

·         Rains return to the Plain’s winter wheat belt next week, before moving into the Midwest and South to slow planting once again.

Commodity Weather Group Forecast

In the U.S., lingering showers occurred in central AR, northern MS, northern/eastern AL, GA, and southern SC in the past day, but drier weather is taking hold. A few very light showers scatter into the far eastern Midwest tomorrow, and scattered showers will occur intermittently between Friday and Tuesday. Best chances will be Sunday night and Tuesday in southeast NE, near the IA/MO border, southeast MN, and around the southern Great Lakes.

Any interruptions to fieldwork are still limited in scope until broader rains arrive next Wednesday in the southwest Midwest and gradually spread across the rest of the Delta/Midwest by early in the 11 to 15 day. Substantial planting progress will occur in the Midwest/Delta in the meantime. The Delta will be most prone to a return of wetter weather concerns in mid to late May, but seeding opportunities return to the Midwest to limit concerns.

Plains winter wheat will see extensive coverage in the 6 to 10 day aid heading wheat once again, with favorably wet 16 to 30 day conditions expected as well. Spring wheat areas in the N. Plains/Canada generally avoid much of the wet weather and see good seeding progress, although some models still show a wetter 6 to 15 day risk.

In South America, rain (.25 to 1”, locally 2.5”) was confined to northwest fringes of Brazil corn/coffee yesterday. Rains remain limited to north fringes for the rest of the week, aiding soy/sugar harvest. Rains return to central/southern corn areas this weekend and early next week, aiding pollination. Rains still likely reach filling coffee later next week but slow sugarcane harvest.

Argentine rains (.25 to 1.25”) are occurring in the southern 1/3 of the corn/soy now, with general weekend rains to stall harvest. Shower potential diminished in the 6 to 15 day, which should allow harvest to recover without damage.

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

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.

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