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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -3/4, soybeans -4, wheat +5, crude mixed, dollar index -.18, gold +4 and the Dow Jones -10.

* Wheat is holding up on the large short fund position and excessive rains across Texas and the Delta.

* Argentina’s presidential election did not produce a winner, so a run-off will be held Nov 22nd.

* Trade expecting corn harvest at 73-77% complete vs 46% last year and 65% average for date. Soybeans expected at 82-87% complete vs 70% last year and a 76% average.

* Euronext and Dalian corn futures are trading higher this morning.

* In a controversial report just released, the World Health Organization classified processed meat as carcinogenic based on “sufficient evidence” it causes bowel cancer and classified red meat as probably carcinogenic based on “limited evidence”.

* On Friday AgRural analysts pegged Brazil soybean planting progress at 20% complete (last week 13%) which is behind the long term average of 30% planted. They estimated Mato Grosso plantings at 20%, well off the typical 50% planted.

* 6-10 for the Midwest looks for above normal temps and normal/above normal precip.

Commodity Weather Group Forecast

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In the U.S., heavy rains (4-8″, locally 20″) were confined to E. TX, LA, SW MS where all but the last 5-10% of cotton/soy harvest was completed. Showers (.25 to 1.25″, locally 2.5″) benefit soft red wheat in much of the Delta and parts of Midwest but missed S. IL, N. IN, NW OH, and S. MI. Those areas will see extensive rains by the middle of this week ensuring that wheat will make favorable early growth. The Delta rains will abate by tomorrow but a substantial rain next weekend again in 11-15 day will slow late seeding and raise the possibility of localized excess moisture. Rains in the Plains hard red wheat return this weekend and should improve moisture for N. OK but E. KS could still be missed keeping that area short of moisture.

In South America, thundershowers in Brazil favored N. & SE Mato Grosso, N. & E. Goias, C. Mato Grosso do Sul, N. Sao Paulo, S. Minas Gerais and W. RGDS over the weekend. Rains favor SW Brazil early this week but expand into Center- South and Center-West Brazil by mid-week and concentrate over that region in the 6 to 10 day period. This will improve moisture supplies for corn/soy areas in that region. The showers will slow late sugarcane harvest and transportation but the expansion into the coffee areas will further improve moisture for the delayed bloom to finally get underway. The 11 to 15 day rains become more scattered in the northern soy areas which should benefit planting progress. Wheat harvest delays are most notable early this week and then improve in the 6-10 day as rains shift north of the main harvest focused in the southern half of the belt. Argentina benefit from rains (.25 to 1.0″) in the SW 1/2 of the wheat belt easing moisture shortages. Rains this week favor N. & W. corn/soy areas with very limited rains in the 6 to 15 day aiding planting progress with mostly adequate moisture for germination and early growth. Weekend frost in far south wheat was minimal.

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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