Home Market Market Watch Morning Outlook

Morning Outlook



Overnight Highlights

* Overnight trade has corn even, soybeans +1/2, wheat even to +4, crude +.40, dollar +.20, gold even and the Dow +30.

* Incoming Argentine Ag Minister Ricardo Buryaile confirmed that the new government will abolish export taxes on corn and wheat after assuming office Dec 10 and will begin its seven year soy tax reduction program.

* In Brazil, the 15/16 soy crop is 81 percent planted and reportedly 44 percent sold. Farmer sales increased only 3 percent over last month as the Brazilian currency has slowly strengthened and futures prices softened. Last year on this date the Brazilian farmer had priced only 26 percent of the crop.

* Palm oil supply continues to be threatened by El Nino weather in Indonesia and Malaysia offering support to soy oil.

* UkrAgroConsult said a combination of warm temps and rain has slightly improved the condition of Ukrainian winter grains, but a significant portion of them remain in poor state.

* News on the charts was last week’s key reversal on the soybean weekly chart after trading to March of ’09 lows.

* Delayed by the Thanksgiving holiday, the Commitment of Traders report will be out this afternoon

* Trade is anticipating the release of EPA’s updated RFS mandates with the expectation for a modest rise in standards.

* Friday funds reportedly sold 9,000 corn, 4,000 wheat and were even on soybeans.

Commodity Weather Group Forecast

In the U.S., rain (.50 to 3.5″, locally 6″) covered the southeast 1/2 of the Plains hard wheat along with soft wheat areas in the northern 3/4 of the Delta and southeast 3/4 of the Midwest over the weekend. Localized flooding occurred in MO/AR/OK. Ice and snow in the Plains resulted in damage to the southeast 1/2 of TX Panhandle cotton. Ice damage to wheat should be minor, as most melts off in the next 2 days. A storm today/tomorrow will produce a mix of rain/snow/ice in the northwest third of
the Midwest, with little impact given that corn harvest is essentially complete. Showers taper off in the Delta today, and drier conditions until late in the 6 to 10 day should then allow standing water to drain before the next heavy rain chance arrives.

In South America, weekend showers scattered across most of Brazil, favoring parts of southwest/far eastern Mato Grosso, central/western Goias, far southeast Minas Gerais, western Sao Paulo, southwest/far northern Parana, western/northeast Mato Grosso do Sul, and far northwest Rio Grande do Sul. While showers will diminish in Center-West/Northeast Brazil this week, rains do return in the 6 to 15 day to keep notable moisture stress limited to mainly the northern 10% of Brazil corn/soy.
The wet pattern will continue in central Brazil (particularly Parana) during the next week, with a break then arriving until late in the 11 to 15 day. While flooding risks are limited, the wet weather is elevating risks for soy rust but also is aiding corn/soy/coffee/new sugarcane growth Late soy seeding
farther south will encounter intermittent delays but benefits from a relatively dry 6 to 10 day period.
Lingering showers in northeast Santa Fe, northern Entre Rios, and eastern Buenos Aires exited
quickly on Friday. Limited rains in the next 10 days will aid late seeding progress. Diminishing
soil moisture (mainly southern Entre Rios/Buenos Aires) will need to be monitored, but a wetter 11 to
15 day outlook would replenish soil moisture.

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.




or 1-866-249-2528