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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -2, soybeans +2, wheat -4, crude +.70, dollar -.10, gold +5.9 and the Dow -85.

* Softer grain trade overnight after yesterday’s short covering while oilseeds are holding up after Monday’s price reversal in soybeans.

* The new Argentine president takes office December 10th. Reports among media say the export tax on corn and wheat could be dropped by the end of December.

* Turkey added to Mideast tensions by shooting down a Russian military jet. Russian officials deny violating Turkish airspace while Turkey reportedly warned the jet 10 times prior to engagement.

* USDA reported winter wheat at 53 percent good/excellent vs 52 last week and 54 percent average.

* Yesterday funds bought 8,000 corn, 5,000 soybeans and 7,000 wheat.

Commodity Weather Group Forecast

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In the U.S., rain/snow (.10 to .50″) was confined to the Pacific Northwest yesterday. The main storm this week develops in the Plains/western Midwest on Thanksgiving Day and spreads across the eastern Midwest/Delta on Friday. The rains still benefit drier wheat areas in eastern KS/northern OK but are likely to be excessive in eastern OK/AR/southern MO and possibly northern IL/northern IN (when combined with melting snow). There is a further flood risk for the Delta late in the weekend, as moisture from a Pacific tropical storm may spread across the area. Snow/ice in the Plains during the weekend could pose a damage threat for TX cotton. Winterkill risks for Plains/Midwest wheat remain minimal, as the crop slips into dormancy.

In South America, an active day of thundershowers aided Brazil crop areas, favoring northern Parana, southern Mato Grosso do Sul, Sao Paulo, much of Minas Gerais, western Bahia, central/eastern Goias, and patchy sections of central/southeast Mato Grosso. Eastern coffee areas will quiet down slightly during the rest of this week, but widespread rain otherwise covers most Brazil crops and favors western Rio Grande do Sul into Parana/southern MGDS. This will include frequent loading de-lays in central ports, but a break does arrive next week to limit excess rainfall concerns and to aid late soy seeding in RGD S. While Mato Grosso will still struggle to see the best rain totals, the regular chances for showers into early December are likely to be adequate to keep soy stable. Argentine showers were limited to light activity in southern Cordoba, north-central/far southwest Buenos Aires, and southern La Pampa yesterday. However, a system for Thursday/Friday appears even a bit more widespread, with another significant event in the 11 to 15 day. This should keep moisture favorable for corn/soy/wheat, with the 6 to 10 day break also preventing any serious fieldwork delays. Cool air will continue to often slow growth.

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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