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Morning Outlook

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Overnight Highlights

* Overnight trade has corn +1 1/2, soybeans +1, wheat +1, crude -.70, dollar +.40, gold -0.6 and the Dow -44.

* Supportive overnight trade on light volume. Light on news with traders situating for the holiday.

* EPA is expected to announce RFS mandates by Monday. Many analysts anticipate an increase in biofuel requirements for 2016.

* Argentine President-elect clarified that the soybean export tax would drop 5 percent each year as stated during his campaign.

* Brazil corruption probe yielded the arrest of ruling party Senator Amaral, marking the first sitting legislator to be arrested. The arrest comes as a part of ongoing broad-reaching corruption investigations throughout the Brazilian government.

* Export sales report will be released Friday morning.

* Yesterday funds sold 8,000 corn, 7,000 wheat and were even soybeans.

Commodity Weather Group Forecast

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In the U.S., rain/snow (.10 to .50″) expanded from the Pacific Northwest into MT yesterday. Rains develop in the Plains/western Midwest tomorrow and spread across the eastern Midwest/Delta on Friday, lingering through the weekend in the Delta. This leads to renewed standing water concerns for Delta wheat. The rains switch to snow in the Plains this weekend, with 4 to 8″ accumulations possible. For the wheat, the moisture and protection from cold is beneficial, but 1/3 of TX cotton
still in the fields will likely encounter damage. Another rain event in the Delta early next week looks lighter. While the area will remain unfavorably wet, problems are unlikely to expand. Southeast dryness in the next 10 days aids cotton/soy harvest.

In South America, thundershowers in Brazil favored far eastern Mato Grosso do Sul, northern Parana, central/western Sao Paulo, far western Minas Gerais, Goias, and northeast Mato Grosso in the past day. Showers will linger but gradually diminish in northern crop areas through Friday, with weekend rains then expanding across central/southern Brazil. Showers then slide back northward in the 6 to 10 day to favor coffee areas, with another round of widespread showers from late in the 6 to
10 day into the 11 to 15 day advancing from south to north across Brazil. While Mato Grosso soy will still not see the largest rain totals and will hold onto moisture deficits in central parts of the state, the scattered showers that do occur will likely be sufficient to limit concerns at this stage. Otherwise,
moisture will be favorable for corn/soy/coffee/new sugarcane growth, and the current break as well as another through much of the 6 to 10 day will aid soy seeding in the far south. Argentina picked up only a few showers in the southwest in the past day, but a widespread event on Thursday/early Friday will aid moisture in most areas. Another break in rain then aids seeding progress from the weekend into next week.

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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