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Morning Outlook

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Overnight Highlights

· Overnight trade has corn -2, soybeans -1, wheat -5, crude +.35, dollar index -.14, gold +6.8 and the Dow Jones +25.

· Dalian corn lower, soybeans higher.

· Quite trade, slow news in grains. Harvest winding down with farmer selling slowing. Export demand for soybeans still good, corn exports still poor.

· Chinese customers have temporarily stopped buying distiller’s dried grains (DDGs) from the United States on concerns that Beijing may launch another anti-dumping probe into imports of the product. DDGs in China are used as substitutes for corn and soymeal in feed milling. The previous investigation was launched in 2010 and subsequently dropped in 2012.

· Wheat is softer on the much needed rains in the Midwest.

· Ag Attaché in Australia estimates 15/16 wheat production at 25 mmt. Last year’s crop was 23.6 mmt while the USDA recently estimated 15/16 production of 27 mmt.

· Tuesday funds sold 10,500 corn, bought 5,000 soybeans and were even on wheat.

· Crude slightly higher, but expectations for the EIA report are for another increase in oil stockpiles – levels not seen at this time of year since prior to World War 2.

· Fed’s FOMC comments will be released this afternoon at 1:00pm central. Economists expect no change in interest rates.

Commodity Weather Group Forecast

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In the U.S., rains (.25 to 1.5″, locally 3.5″) favored the eastern 3/4 of the Midwest and northeast 1/4 of the Delta yesterday. The rains notably improved moisture for soft red wheat germination and early growth. Rains linger in the eastern 1/3 of the Midwest today. Next rains benefit Plains hard red wheat early weekend, likely easing moisture stress in the eastern 1/4 of the crop area. Delta/Midwest rains late weekend slow wheat seeding but are still mainly beneficial for recharging low soil moisture reserves. Plains hard red wheat should have another chance for needed moisture the following weekend further aiding late fall growth. Midwest corn/soy harvest delays will ease with drier weather rest of this week and then much of next week.

In South America, thundershowers in Brazil favored S. Mato Grosso, S. Mato Grosso do Sul, N. & SW Sao Paulo, SW & C. Minas Gerais and NW Parana yesterday. Rains scatter across most coffee and the north 1/2 of soy areas next 3 days. Rains increase over much of the corn/soy areas over the weekend as a cold front enhances activity notably. Showers remain active across northern areas through the first half of next week before tapering off in the 11-15 day period and shifting back into S. Brazil then. Improved moisture supplies for corn/soy areas will be widespread. The drier trend in 11-15 day will aid corn/soy seeding progress. Late sugarcane harvest and transportation should improve in the 11-15 day. The improved coffee bloom will need to be watched as drier conditions in the latter half of November could raise stress concerns. Wheat harvest delays are limited next 10 days. Argentina rains cross the region today/ tomorrow helping to keep moisture adequate for heading wheat and early corn growth with dryness concerns limited to SE fringes of the belt. Drier conditions in the 6 to 15 day aid corn and early soy seeding. Moisture for wheat will decline but a wetter 16-20 day would provide timely rains.

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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