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Morning Outlook

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Overnight Highlights

·         The dollar consolidated just below 4-1/2-year highs overnight, while crude oil consolidated just above three-year lows.

·         The grain and oilseed markets were relatively quiet overnight, with soybeans and soymeal bouncing off support and wheat slipping lower. Corn was steady to firm.

·         USDA reports that the corn and soybean harvest reached 80 and 90% complete respectively as of Sunday.

·         Recent showers boosted winter wheat crop ratings in the Southern Plains, while Kansas ratings dropped on dryness and Midwest wheat ratings slid on cool wet conditions, but overall ratings strengthened in the past week and are above average for mid-November.

·         Rain and snow showers stretch from Illinois north through Wisconsin this morning, marking the leading edge of Arctic air spreading south and east across the Midwest.

·         The cold will push wheat into dormancy and push moisture out of the region, allowing harvest to progress over the next 10 days.

·         Brazil rains are expected to favor Brazil’s previously dry northern belt over much of the next two weeks, aiding crop development.

Commodity Weather Group Forecast

In the U.S., a band of snow (2 to 8”, locally 16”) fell in SD and central MN yesterday. Cold, dry conditions will aid the rest of the Midwest corn/soy harvest over the next 10 days. Cold will push C. Plains and Midwest wheat into dormancy, but winterkill damage threats are limited to the NE Panhandle and northeast CO Thursday morning. Delta dryness will allow much of late soy/cotton harvest to be completed, but late harvest will be slowed early next week. Late-seeded soft red wheat in the southern Midwest/northern Delta will see cold hamper germination and early growth and could lead to minor reductions in acreage.

In South America, showers were limited to mainly southern Mato Grosso, southern/northwest Goias, northern Minas Gerais, central Bahia, and far northern Mato Grosso do Sul yesterday, with showers also noted in far northern Argentina but only very light activity in the south. A rain event late next week appears less impressive on most guidance for Argentina, although confidence is still low. This could give wet corn/wheat areas in much of Buenos Aires/Entre Rios a relatively dry stretch until late in the 11 to 15 day. This may help to limit the severity of wheat losses/disease and aid late corn seeding to some extent, but wetness issues may still be difficult to fully eliminate.

Brazil rains will favor northern areas for much of the next 2 weeks, aiding soil moisture and crop development. Any dry patches that do linger are most likely to be in Parana but should be very limited in scope. Rains appear to remain active in much of Brazil in the 16 to 30 day but do not appear particularly excessive, while the CFS and Euro guidance (although low confidence) both show some needed drying in southern Argentina.

Morning Market Snapshot

 

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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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.

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