We kicked off the day with PPI MoM & YoY, Core PPI MoM & YoY, Retail Sales MoM & YoY, Export Sales, Initial Jobless Claims, Retail Sales Ex Autos MoM, Continuing Jobless Claims, Jobless Claims 4-Week Average,

And PPI Ex Food, Energy & Trade MoM & YoY at 7:30 A.M., Business Inventories MoM and Retal Inventories Ex Autos MoM at 8:00 A.M., EIA Natural Gas Storage, 4-Week & 8-Week Bill Auction at 9:30 A.M., and 15-Year & 30-Year Mortgage Rate at 10:00 A.M.

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The EIA’s weekly energy stocks data report showed draws in crude oil of 1.536 Mil barrels last week marking the largest 1-Week decline in 7 week. Compared to a year ago, stocks were 33 Mil barrels (7%) smaller marking the 10^th consecutive week of year-over-year declines. Cushing was down 220,000 barrels after increasing by 701,000 last week. Gasoline stocks dropped by 5.62 MB, which is the largest 1-week decline in over a year, and well above expectations of 1.( MB, Distillate stocks rose by 888,000 barrels, which was far above expectations of 150,000 increase. One of the few markets not experiencing shortages for the moment.

We’ll start out with US weather and move over to Argentine & Brazilian weather. The kicker to the weather pattern is the midday GFS output being ignored, which is adding widespread rainfall of 2-5” in TX, OK, KS, NE, and IA March 26-28. No other model trended wetter. This is too little too late for Oklahoma & Texas that are having wildfire warnings like a thunderstorm warning in spring. March 26 is still 12-days away. The live cattle and feeder cattle market should perk up even further taking into account all the livestock as herds are at lows dating back to the 1950’s More blizzards are pounding the West again, Colorado received their share in a 48 hour period.

The EU & GFS models are at odds over the 10-day precipitation totals in Brazil. The better performing EU model keepsrainfall confined to far S Brazil, leaving the safrinha corn belt hot/dry into March 22^nd . There remain hints of improved rain chances beyond March 23^rd, but confidence in extended range details is low. Rain has been extracted from Brazilian forecast since early March. Heavy rainfall of 3-4” is forecast in far S Brazil and NE Argentina. Drier weather will be needed here in April to facilitate row crop harvesting. All eyes are on Brazilian rainfall. Dryness in N Brazil in early/mid-March is a big deal given this is a typically wet time of year. There will be limited tolerance for sustained dryness in Mato Grosso, Mato Grosso do Sul, and Parana beyond the next 10-days.

CBOT grain futures were mixed this morning with spot palm oil futures rising to their best levels in a year while soybean futures basis May need a technical close above 1202. The 50-day moving average. CBOT wheat values are lower on the expectations that recent Chines SRW sales cancelations will be itemized in today’s export sales data and could include additional canceled cargoes that fell below 100.000 MT’s daily reporting requirement. The CBOT has a bearish feel with Northern & Central Brazilian weather forecast adding rain for the winter corn crop. Wednesday’s CBOT open interest data showed corn gaining 15,305 contracts, soybeans gaining 8,859 contracts, and Chicago wheat adding 3,101 contracts. Soybean oil open interest was up 8,723 contracts while soybean meal fell 70 contracts. The recent CBOT rally is more than short covering with new money flowing into the space. Hedge fund managers see grain values as “cheap” heading into a new Northern Hemisphere growing season.

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