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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -1, soybeans +5, wheat -2, crude -.60, dollar index -.13, gold -1.4 and the Dow Jones -25.

* Dalian Soy, Soymeal and corn are higher.

* Soybeans supported by continued Chinese demand and Chinese crush margins while corn continues to struggle to be competitive on the world market.

* The EU’s crop-monitoring service MARS on Monday raised its estimates for corn and soft wheat yields in this year’s harvest and warned about potential damage to the 2016 winter crops in NE Europe due to dry weather.

* Leaders in Congress reportedly reached a tentative budget pact to set government spending levels for the next two years. The deal could be voted on as early as Wednesday.

* Shipping sources suggest 54,000 MT Brazil corn cargo is scheduled for delivery to Port of Wilmington NC by Bunge. Traders cite the strong dollar and plentiful S.A. supplies.

* Monsanto announced it plans to shut three research and development centers in 2016 affecting 90 jobs as it restructures operations to cut costs. Earlier this month it also announced a cut of 2,600 jobs in its restructuring plan. Monsanto currently has about 22,500 employees.

* Floor reports have funds buying 6,000 corn, 11,000 wheat and selling 10,000 soybeans on Monday.

* 6-10 day forecast has above normal temps, above normal precip in East, below in West.

Commodity Weather Group Forecast

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In the U.S., rains (.25 to 1.5″, locally 2.5″) favored all of the Delta except LA which turned dry yesterday. The rains were beneficial for soft red wheat germination and early growth. Rains are now expanding north into the Midwest and will improve moisture for soft red wheat growth across that belt as well. Delta rains return next weekend slowing wheat seeding and localized excessive wetness remains a concern for LA/S. MS. Plains hard red wheat sees only widely scattered showers today but rain extent this weekend has improved and should ease dryness in N. OK and at least SE KS aiding late fall growth. Mid-west corn/soy harvest sees delays in the E. 1/2 of the belt today and again late weekend but damage potential is minor.

In South America, thundershowers in Brazil favored NE Mato Grosso, NE Mato Grosso do Sul, Sao Paulo, far S. Minas Gerais and SW Parana yesterday. Rains favor coffee areas the next 2-3 days and scatter Center-West soy areas. Rains steadily increase over much of the central and northern corn/soy areas by the weekend and remain active across these areas through the first half of next week. Improved moisture supplies for corn/soy areas should be widespread by the end of next week when showers taper back off. The drier trend then will aid corn/soy seeding progress. The rains will slow late sugar-cane harvest and transportation while coffee bloom should improve in nearly all areas. Wheat harvest delays should ease after today until the weekend and only light showers then should allow more progress early next week. Argentina saw scattered rains (.25 to 1.0″) in Santa Fe/N. Buenos Aires yesterday. Rains cross the region mid-week still favor N. & W. corn/ soy areas but potential has improved for much of the area which would keep moisture adequate for wheat heading during the drier 6 to 15 day. That dry spell will ensure that corn and early soy seeding maintains a favorable pace.

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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