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Morning Outlook



Overnight Highlights

·         Grains traded mixed in the overnight with corn and wheat firmly higher and soybeans in a choppy 12 cent range. Soybeans ae currently unchanged.

·         Traders in Singapore say soybean meal prices in China are under pressure and have fallen close to 7% since last week. Crush margins have begun to turn red in some areas, which when coupled with frontloaded imports in December and January could slow demand down from its initial pace.

·         Ukraine’s Agriculture Ministry released a report showing 82% of the winter grain crops in good to satisfactory condition.

·         John Deere and Co. says industry sales for agricultural machinery in the US and Canada will be down 25% to 30% in 2015. They forecast corn prices for 2014/2015 at $3.45 versus their previous estimate of $4.10 and soybean prices at $9.25 versus their precious estimate of $10.25.

·         Market hours will be normal today with the market closed tomorrow for the holiday and reopening at 8:30 a.m. on Friday morning till an early close at noon, both CST.

Commodity Weather Group Forecast

In the U.S., light snow fell in North Dakota (1 to 3”), while rains covered the Southeast (mainly .25 to 1.5”). Rains linger in the Carolinas today, with a few very light showers in the central Midwest and again in southeast Midwest next Monday. The next significant rains for the Midwest/Delta hold off until the middle of next week. This should allow an upturn in late harvest progress. The rain event is not expected to be heavy enough to damage crops still in the fields or wheat stands. Warming in the 6 to 15 day is more muted and may not be quite enough to significantly aid germination for late-seeded Midwest wheat.

In South America, light showers scattered into southern parts of Cordoba/Santa Fe in the past day, but activity remains somewhat limited in Argentina overall this week. However, widespread and substantial rains this weekend remain likely, and model agreement continues to improve on a second significant event in the 11 to 15 day. The return of wetter weather will slow the second 1/2 of corn/soy seeding and raise wetness concerns once again for wheat (especially in already wet fields in the southeast 1/3 of the belt). Near to above normal rains are also expected into the 16 to 30 day.

In Brazil, thundershowers favored southern Parana, Mato Grosso do Sul, northern/western Sao Paulo, western Minas Gerais, and northern/eastern Goias in the past day. Widespread rain will occur in the next 10 days to aid crops but will be heavy at times (4 to 8”) in mainly southern Minas Gerais, Goias, southeast Mato Grosso, northern Sao Paulo, and northern MGDS. While this may raise some pockets of wetness concerns, our 11 to 15 and 16 to 30 day outlooks still tend to be less active in the north.

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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