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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1/4, soybeans -1 1/2, wheat even, crude oil -.50, dollar -.05, gold +4.4 and the Dow -45.
* Grains lower to mixed overnight. Funds done with short-covering for now and South American weather and yields are good.
* Offshore the veg oil market is softer with Malaysian palm oil lower and Paris’ wheat futures lower as FOB offers continue to seek buyers.
* Argentine Buenos Aires Grain Exchange estimate for the 15/16 corn crop came in at 25 mln mt vs last year’s crop of 28.2 mln.
* USDA will release their monthly Cattle on Feed report this afternoon. Estimates are for On Feed 99.9%, Placements 99%, Marketings 98.4%.
* Argentina continues to receive beneficial rainfall for crops in reproductive stages.

Commodity Weather Group Forecast

In South America, a significant thunderstorm complex overnight brought locally heavy rain to parts of central Cordoba, central/southern Santa Fe, Entre Rios, and northern Buenos Aires. This activity lifts north today, with a few showers by Monday night/Tuesday in the southwest corner of the belt and thundershowers then favoring central parts of the belt next Wednesday night. A more limited rain pattern otherwise remains anticipated for the balance of the 15-day period to keep any concerns

with excessive rainfall isolated. The moisture is otherwise very timely to support high corn/soy yield potential and will prevent any stress with a brief warming (low to mid 90s in the hottest areas) early next week. Brazil picked up scattered showers in mainly western/east-central Mato Grosso, far southwest Goias, southern Minas Gerais, central/far southwest Sao Paulo, central/southeast Mato Grosso do Sul, and western/far eastern Parana in the past day. Showers will continue to be most

frequent in southern Minas Gerais, Sao Paulo, MGDS, and Parana in the next ten days. While not expected to be heavy enough for major concerns and welcome for late coffee/sugar growth, this will slow soy harvest/safrinha corn seeding and port loading in these areas. However, a contingent of preferred forecast guidance has become more supportive of an expansion of 11 to 15 day rain in Brazil that would also aid recently drier safrinha corn in the Center-West.

In the U.S., rains (.25 to 1″) fell in southern/ eastern parts of the Pacific Northwest wheat belt

yesterday. Rains in the southeast Midwest/Delta/ Southeast early next week and again in the southeast Midwest/Delta a week later are mainly beneficial for wheat, with only isolated areas of excessive wetness in MS. Diminished rain potential in the S. Plains in the 11 to 15 day may slow early spring growth but is not an immediate damage threat, as rains likely increase in the 16 to 30 day.

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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