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Morning Outlook

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Overnight Highlights

* Overnight trade has corn -3/4, soybeans -1 1/2, wheat -1-3, crude +.30, dollar even, gold even and the Dow +100.

* Markets still waiting for more signals out of Argentina regarding their peso and direction from congress on the Biodiesel credit.

* Safras Mercado estimates Brazil soy planting at 89 percent complete compared to 97 percent on average. Corn planting is 96 percent complete.

* Barge freight is now under pressure after recently firming. St Louis freight dropped 20 percent.

* NOPA crush report due out today at 11:00 am. Analysts expect 161.7 mln bu November crush vs previous month at 158.89 and Nov ’14 at 161.2 mln bu.

* Financial markets are anticipating the Fed to pull the rusty “raise rates” lever tomorrow for the first time since 2006.

* Monday funds bought 6,000 corn, 4,000 soybeans and 2,000 wheat.

Commodity Weather Group Forecast

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In South America, showers favored western Rio Grande do Sul, far southwest Parana, and western Santa Catarina in Brazil in the past day. Southern corn/soy areas remain favored throughout the rest of the month. While any flooding risks should remain fairly localized, the wet pattern will keep rust risks elevated for the southern 1/3 of soy, requiring fungicide applications. Showers are still expected to be limited this week in the Center-West and Northeast but then expand after the weekend and again late in the 6 to 10 day and into the 11 to 15 day. While Bahia still misses out, the rains would be very timely following some expansion in Mato Grosso dryness this week. If rains falter next week, stress would expand to include up to 1/3 of Brazil soy and 15 to 20% of corn/rice. The warm pattern in northern crop areas remains primarily due to very warm nights rather than severely hot days. The northeast 1/4 of the coffee belt could begin to slip drier again, but moisture otherwise remains favorable for coffee/sugar. Argentina picked up scattered showers in central/southeast parts of Cordoba and Buenos Aires as well as northern Santa Fe and points north. While the outlook is not quite as wet, showers are likely to remain more than adequate to support most corn/soy, with drier spots for Buenos Aires wheat too late for notable yield impacts.

In the U.S., rains (.10 to .50″) lingered in the southeast 2/3 of the Midwest wheat yesterday, bringing needed (albeit light) moisture to eastern soft wheat. Only light showers fall in the southern Delta tomorrow and the Southeast on Thursday. The next significant rains come in the first half of next week in the Delta/Midwest soft wheat, but heavy rains are confined to the southeast 1/4 of the Delta. Heavier rains in the Delta/southeast Midwest in the 11 to 15 day could lead to localized wetness damage. A lack of strong cold pushes over the next 2 weeks keeps Plains/Midwest winterkill threats minimal.

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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