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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -1/2, soybeans -10, wheat -2, crude -.50, dollar -.10, gold -5.9 and the Dow -5.

* The much anticipated Argentine election has the center-right opposition candidate as the victor by a narrow margin. The President-elect Macri has promised the elimination of corn and wheat export taxes and currency policy friendly to Argentine exporters. Longer term implication is likely the increase in production of corn and wheat in a country that currently plants 62 percent of its farmland to soybeans. Immediate impact has been pressure on the soybean complex in overnight trade.

* Many of President-elect Macri’s promised reforms including the lowering or elimination of export taxes and the reform of current currency policy will be made difficult by Peronist opposition in Congress.

* China reported November DDG imports at 660,193 mmt. Down 29 percent from September but up 460 percent from last year November. Year to date DDG imports total 5.9 mmt, up 14.2 percent from last year.

* Commitment of Traders showed selling by Managed Money of corn and wheat for the week ending November 17th. Managed Money is now net short 84,663 corn, an increase of 26,259 and net short wheat 41,409 – an increase of 20,464.

* Friday funds sold 1,000 corn, 2,500 soybeans and 3,500 wheat.

* USDA October Cattle on Feed met trade expectations. On Feed 102 percent, Placements 96 percent, Marketings 97 percent. This makes placements the lowest since October 1996 and the fourth month in a row of placements below a year ago.

Commodity Weather Group Forecast

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In the U.S., weekend snow/rain (.25 to 1.25″) fell across the heart of the Midwest, with a snow band of 2 to 8″ (locally 16″) in southeast SD, northern/eastern IA, northern IL, southern WI, northern IN, and MI stalling very late corn harvest. A significant storm is still slated to develop in the Plains on Thanksgiving and then spread rains into the Midwest/Delta through the weekend. The rains still benefit drier areas in eastern KS/northern OK wheat but may be excessive in AR/southern MO. The cold push did produce single digits in northern IL, but wheat was protected by snow. The cold push at the end of this week looks weaker but should help push C. Plains/Midwest wheat safely into dormancy while still keeping winterkill threats minimal.

In South America, weekend thundershowers scattered from west-central to eastern Mato Grosso and also reached much of Goias, Minas Gerais, Espirito Santo, southern/western Bahia, southeast/far northern Sao Paulo, northern Mato Grosso do Sul, and eastern Parana in Brazil. While no more than anticipated, the rains are adding to topsoil moisture in Center-West and Northeast Brazil, with plenty of additional opportunity for rain in the next 15 days. The heaviest totals are expected in western Rio Grande do Sul, Parana, and southern MGDS this week but shift around through the period to limit excess moisture concerns, although appropriate measures will remain important to limit soy rust concerns. This will keep crop conditions largely favorable for summer corn/soy/coffee and new sugarcane growth, although late soy seeding in RGDS will be slow this week. Argentine rains favored southern Cordoba, far southwest Santa Fe, and northwest Buenos Aires overnight, with lighter weekend showers extending farther southeast in Buenos Aires. Significant rain events on Thursday/Friday and again in the 11 to 15 day will support good moisture for corn/soy/wheat without threatening serious fieldwork delays.

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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