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Morning Outlook

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Overnight Highlights

* Overnight trade has corn +1, soybeans +3, wheat -3-6, crude +.65, dollar +.22, gold +5.6 and the Dow Jones -40.

* Talk of China again looking at soybean offers and lower dollar supporting soybeans.

* USDA report tomorrow at 11:00 am CST. Trade expecting slightly higher production numbers for both corn and soybeans vs the October report.

* Dalian Exchange has soybeans and corn higher, soymeal lower.

* Trade expecting USDA harvest progress this afternoon to show corn harvest +92% complete and soybean harvest +95% complete.

* Commitment of Traders report showed combined futures and options for Managed Money as of Nov 3; CBOT wheat -18,241 net short position from reducing short positions by -9,929 and increased long by 5,094. Corn net long position of 24,765 by increasing short positions by 1,262 and reduced longs by -7,572. Soybean a net short position of -20,476 by increasing short position by 12,878 and reduced long positions by -9,975.

* Trade will be watching how much support the trucker strike in Brazil gets this week.

* North and central west Brazil will be warm and dry this week, but extended forecast has rain chances increasing.

* FSU showers this week ease dryness in Ukraine wheat. East Australia sees more wheat harvest shower delays.

Commodity Weather Group Forecast

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In the U.S., weekend rains (.50 to 2.5″, locally 4.5″) covered the southern 1/2 of the Delta and Southeast. Rains linger in the Southeast today. The region then trends drier for the rest of the 10-day period, allowing cotton/soy harvest to recover. Delta wheat sees only a few light showers at mid-week, with more notable rains early next week that will keep late wheat seeding slow. However, the drier period over the next week should keep wetness damage in check for now. Eastern KS dryness is likely to persist over the next two weeks and will hamper late fall growth of the crop, as moisture shortages have redeveloped. Midwest rains early next week should benefit most soft wheat areas, while corn harvest delays will be minor this week.

In South America, weekend showers gradually increased, favoring parts of central/eastern Mato Grosso, southern Goias, southern Minas Gerais, northern Sao Paulo, northeast/far southern Mato Grosso do Sul, far southern Parana, and Santa Catarina in Brazil and western Cordoba, eastern La Pampa, and northwest Buenos Aires in Argentina. While a few showers will still scatter into Center-South Brazil this week, most of the rain focuses on southern wheat areas, and northern crop areas turn a bit hotter. However, rains still expand next week in the rest of the belt, particularly late next week. This will prevent moisture stress, while frequent southern rains continue to hinder wheat harvest and threaten some quality reductions. While showers will cause intermittent interruptions to sugarcane fieldwork and port loading in central Brazil during the next two weeks, rains are less active than in Friday’s outlook. Argentina picks up showers through tonight and again by Thursday,
as well as late in the 6 to 10 day period. The combination of these rain events will replenish soil moisture, although the cool spring has still led to both slow wheat growth and delayed spring seeding progress.

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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