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Morning Outlook

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Overnight Highlights

* Overnight markets have corn -1/2, soybeans +3/4, wheat -1, crude oil +.55, dollar +.14, gold -6.0 and the Dow +85.
* Grain markets mixed overnight on anticipation of today’s USDA supply/demand report.
* Trade anticipating incrementally larger stocks in corn, soybeans and wheat from last month in today’s 11:00 CT supply/demand report.
* China’s Dalian exchange has soybeans, corn and soy meal lower.
* Hard red winter wheat show good condition ratings despite threat of dryness in the southern Plains.
* In currencies, the Russian ruble is trading at its highest level in more than two months and the Brazilian real is at its highest since last August – helping US competitiveness on grain exports.

Commodity Weather Group Forecast

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In South America, spotty showers were limited to mainly northeast Cordoba, central/southern Santiago del Estero, west central/far northern Santa Fe in the past day for Argentina. Very limited showers in the next week will allow wet fields in Entre Rios, southern Santa Fe, and bordering sections of Cordoba (20% of corn/soy) to drain, but a system next Thursday/Friday reaches more of the central corn/soy belt on today’s outlook. Near to above normal rainfall remains possible in the 16 to 30 day for much of the belt, leading to harvest delays for corn/soy and possibly causing redevelopment of concerns with excess moisture. Showers scattered from southwest to northeast in Mato Grosso and also occurred in parts of central/northern Tocantins, central/southwest Goias, and southern/coastal parts of Brazil in the past day. Daily showers have narrowed dry safrinha corn areas to less than 15% of the belt and continue for the next week, with dryness in Robusta areas lingering but affecting only about 20% of the coffee belt. Rains diminish in recently wetter central parts of Brazil after the next couple of days, easing fieldwork and port loading delays.

In the U.S., rain (.50 to 2.5″, locally 10″) fell in the southeast 1/4 of the Plains, western 2/3 of the Delta, and southwest 1/4 of the Midwest wheat in the past day. Moderate to heavy rains continue across the Delta and southern Midwest today/tomorrow, expanding flooding (especially in AR/LA/MO). Light to moderate showers over the weekend benefit the eastern 1/3 of the Plains but keep the delta/southern Midwest excessively wet. Additional rains later in the 6 to 10 day and late in
the 11 to 15 day are likely to prolong wetness problems for mainly Delta soft red wheat and early
corn planting. Dryness in the southwest 1/3 of the Plains hard wheat belt over the next 2 weeks will
lead to increasing stress on vegetative growth.

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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