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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -2, soybeans -1, wheat -5, crude +.35, dollar even, gold -2.2 and the Dow +53.

* Stock market losses and global growth concerns continue to weigh on markets with grains weaker overnight.

* Weekly export sales out this morning.

* South American weather forecast continues to look favorable over the next two weeks

* Russian and French offers continue to dominate the global wheat trade.

* NOPA report out tomorrow. December estimates are for 157.8 mln bu crushed vs a year ago same month at 165.38 mln.

Commodity Weather Group Forecast

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In South America, scattered showers occurred in central/northeast Brazil in the past day, favoring parts of western/far northeast Mato Grosso do Sul, northern Sao Paulo, far western Minas Gerais, north-central Bahia, southeast/far northwest Goias, and central/far northeast Mato Grosso. Frequent rains in northern parts of the corn/soy belt through the next ten days will continue to improve soil moisture but will also slow early harvest progress, with the heaviest totals likely in northern Goias,
Tocantins, and far western Bahia possibly causing very localized areas of excess moisture. The 11 to 15 day shifted wetter south and started to trend drier north, which would be welcome for harvest areas in the Center-West and recharge topsoil moisture in southern corn/soy areas after some needed recent drying. However, confidence remains low, as many forecast solutions still attempt to hold onto a northern focus to rainfall. Sugarcane areas have been quite wet this week, and beneficial
rain also eases dryness in coffee areas during the next ten days. Argentina was mostly dry, with highs largely in only the 80s. A few showers are possible in the south/west later today and again Saturday, but the main rain chances are early next week and particularly toward the end of the 10-day period. The rains will aid corn/soy growth after warmer temperatures (90s) from this weekend into early next week, but a few wet pockets will linger in the west (approximately 15% of the belt).

In the U.S., rain (.25 to .75″) was confined to the Pacific Northwest wheat yesterday. The next significant showers are not expected for another week, allowing Midwest/Delta wheat to drain off
excess moisture. The showers late next week will benefit Plains hard red wheat and are not heavy
enough for renewed wetness issues in most of the Midwest/Delta soft red wheat. One last strong cold
push early next week only poses minor winterkill risks for the northwest fringes of Midwest wheat.

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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