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Morning Outlook



Overnight Highlights

* Overnight trade has corn even, soybeans +1, wheat +1, crude +.18, dollar -.27, gold +4.1 and the Dow +16.

* Mixed, quite overnight trade. Some help from higher energy and lower US dollar.

* Weekly USDA export sales out this morning. To meet USDA projections, weekly sales need to average corn at 27 mln, soybean at 11 mln, wheat 10 mln bu.

* Quarterly Hogs and Pigs report had all hogs and pigs on Dec 1 at 101 percent of a year ago, just under analyst estimate of 101.4 percent.

* Northern Brazil receiving scattered showers with the market anticipating a shift north of rain patterns in the next couple weeks.

* CME agricultural products close at 12:00 CT today.

Commodity Weather Group Forecast

In South America, widely scattered showers occurred in northern/south-central Mato Grosso, western Goias, northeast Mato Grosso do Sul, and southern/western Sao Paulo in Brazil during the past day, with more organized rains in central/eastern Parana, Santa Catarina, and particularly Rio Grande do Sul (locally up to 7″ in west-central RGDS). Rains will continue to favor the south through the weekend, but heaviest totals (4″+) shift a bit farther north. Southwest Parana and western RGDS
stand the greatest risk for excess moisture, particularly in parts of west-central RGDS that have now reported around 20″ this month in some locations. While a few weekend showers will scatter into Center-West Brazil, up to 20% of soy and summer corn will remain at risk for moisture stress in the next week. Models then remain very supportive of a significant upturn in rain (possibly averaging at least 2 to 4″) for dry northern crop areas and a beneficial break in the south starting late next week.
This will at least temporarily ease concerns, including a welcome return of moisture for sugar/coffee areas. Argentina picked up locally heavy rain in far northern areas in the past day, but a few scattered showers also occurred in southern Cordoba/southwest Santa Fe. The pattern is relatively quiet until the middle of next week. While some guidance does show wetter risks, 6 to 15 day showers are expected to be beneficial for corn/soy and should only cause minor delays to wheat harvest.

In the U.S., rains (.25 to 1.5″, locally 4.5″) covered most of the Midwest/Southeast/northern Delta
wheat in the past day. Rains remain frequent in the Midwest/Delta through Monday, while heavy
snow (6 to 12″+) in the southwest Plains benefits wheat but stresses livestock. Flooding centers on
the northern Delta/southern Midwest, but a drier 6 to 15 day allows fields to drain and limits damage.
Cold pushes in Plains/Midwest wheat remain too weak for winterkill in the next two weeks.

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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