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Morning Outlook

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Overnight Highlights

* Overnight markets have corn +1/2, soybeans +3, wheat even, crude oil +.66, dollar +.05, gold +13.0 and the Dow +120.
* Grains mixed to higher on outside market support, but generally slow news. Higher Dalian corn and steady global FOB wheat.
* Brazil state of Goias dropped plans to impose local corn and soybean export tax from pressure from farm groups.
* French farm organization AGPM is forecasting 2016 corn planted area in France to be down 6 percent from 2015.
* Preliminary base insurance prices will be close to 3.86 for corn, 8.85 for soybeans and 5.13 for spring wheat.

Commodity Weather Group Forecast

In South America, showers were mostly 1″ or less but were unexpectedly common in Argentina overnight, catching parts of Cordoba, northern/far southern Santa Fe, southern Entre Rios, southeast Santiago del Estero, and northern Buenos Aires. While this was not needed given recent wetness worries, the bulk of the guidance still supports a quieter pattern going forward in the next two weeks. While a minority of ensemble members lean wetter, showers are expected to favor the west on

Friday/Saturday, with drier weather otherwise allowing fields to drain and limiting damage risks to corn/soy until mid-month. Wettest spots have been in far east-central Cordoba/southern Santa Fe/Entre Rios/far north-central Buenos Aires in the past two weeks (about 1/4 of the belt), with rain totals of 5 to locally 10″. Brazil picked up showers in patchy sections of mainly central Mato Grosso, southern Goias, central/southeast Minas Gerais, and central Mato Grosso do Sul in the past day. A

surge of moisture remains likely in the first 1/2 of March across recently drier areas, aiding safrinha corn in the Center-West, late soy growth in the Northeast, and late coffee/sugar growth in the Center-South. Showers may begin to ease in the 11 to 15 day, with rains reverting to the south in the 16 to 30 day as support from the tropical Pacific (MJO) wanes. The more limited rain will aid fieldwork and limit port loading interruptions in recently wetter central/southern areas in the meantime.

In the U.S., rain (.25 to 1″) fell in eastern OK in the past 24 hours. Showers favor the northern Delta/

eastern Midwest wheat today, but the main storm comes at the middle of next week and eradicates

dryness in the western Delta/western and central Midwest. Localized flooding is possible in the Delta,

but most wheat benefits from the recharged moisture. Plains showers remain limited to north

and east areas over the next 2 weeks, with stress on spring growth in the southwest 1/4 of the belt.

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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