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Morning Outlook


Overnight Highlights

* Overnight markets have corn even, soybeans +1, wheat +1, crude oil -.50, dollar +.25, gold -3.0 and the Dow +75.
* Grains stable overnight after mid-week weakness from fund and farmer selling.
* China futures lower on concerns over potential government actions to unload corn reserves.
* USDA Outlook Forum this morning projected the 16/17 corn crop at 13.825 bln bu vs 15/16 of 13.601 bln and a soybean crop of 3.810 bln bu vs 3.930 bln last year.
* Thursday funds sold 13,000 corn, 8,000 soybeans and bought 3,000 wheat.
* Commitment of Traders report this afternoon will show Fund positions as of Tuesday’s trade.

Commodity Weather Group Forecast

In South America, showers scattered across mainly central/far western Mato Grosso, central/southeast Minas Gerais, southern/western Sao Paulo, eastern Parana, northeast Santa Catarina, and northwest/eastern Mato Grosso do Sul in Brazil during the past day. While this week’s rainfall remains well below model projections, the showers did begin to reach into drier

safrinha corn areas in Mato Grosso, and a more active 6 to 15 day period is still favored for the Center-West. While showers will cause intermittent fieldwork and port loading delays for central Brazil (particularly in the 1 to 5 day), rain totals are not likely to be heavy enough for serious concerns. Expanding rains in the next two weeks also aid late growth in most coffee/

sugar areas. There is still some drier risk in recently drier northern coffee/safrinha corn areas of Brazil, as some models hold rains farther south. However, the model trends this week have generally been increasingly supportive of our wetter outlook. Argentina picked up scattered showers in both northern and southern parts of Cordoba as well as southern Santa Fe, southeast Santiago del Estero, southern Entre Rios, and northern Buenos Aires in the past day. However, amounts were not quite

as heavy as expected in most areas, and a relatively quieter pattern through much of the next two weeks in the belt should ease recent wetness concerns and maintain high yield potential.

In the U.S., light snow (1 to 3″) lingered in the eastern 1/4 of the Midwest in the past 24 hours. A

storm early next week brings beneficial moisture to NE but could miss KS, while the Midwest/

northern Delta wheat also benefit from moisture then and late in the 6 to 10 day. A storm covers

the S. Plains/Delta/southeast Midwest in the 11 to 15 day. TX/OK wheat should benefit from added

moisture. Southeast CO/southwest KS are still not favored, and moisture shortages remain.

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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