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Sunday Outlook

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Weekend Developments

·         US grain markets will have a normal trading schedule this Wednesday ahead of Thanksgiving. Markets will not trade Thursday night and will re-open Friday at 8:30am CST with an early 12:00pm Friday close.

·         The price of US gasoline has fallen to $2.84/gal which is the lowest average price since November 5, 2010.

·         The US military has been authorized to target Taliban militants in Afghanistan if they pose a direct threat to its forces or provide support to al Qaeda according to US officials.

·         The announcement from Mario Draghi that the European Central Bank was prepared to deliver additional stimulus into the stagnating EU economy and a surprise cut in interest rates by the People’s Bank of China propelled stocks and the US dollar higher on Friday.

·         Widespread moisture over the weekend continue to hamper final harvest progress in the eastern and northeastern corn belt.

·         Rains continue to support South American crop development with a few areas beginning to deal with potential excess moisture.

·         Nearby support for corn is at $3.60 and soybeans at $10.00.

Commodity Weather Group Weekend Summary

 

In the U.S., rains have favored the southeast 1/4 of Plains wheat, the western 1/2 of the Delta and the Southeast this weekend, with rain amounts of .25 to 1” (locally 3”). Significant rains concentrate in the Delta, central/eastern Midwest, and Southeast in the next 2 days, with .25 to 1” (locally 2”) amounts stalling late harvest. Snowfall of 1 to 4” is possible in the central Midwest tomorrow. Drier weather then settles in for nearly a week before another substantial rain occurs around the end of the 10-day period. This event could threaten cotton harvest in the TX panhandle and continue to stretch out the very late harvest and wheat seeding in the Delta/Midwest. Warmer trends in the 11 to 15 day could improve wheat germination prospects for the southern Midwest/northern Delta.

 

In South America, a few light showers lingered around the edges of Argentina early in the weekend (mainly north/east), and scattered activity is possible tonight in central/southeast areas and in the far northeast tomorrow. However, the main rain event remains next weekend, when .50 to 2.5” amounts are possible in much of the belt. Additional showers are possible late in the 11 to 15 day as well, and the rain events will slow corn/soy seeding and hinder maturing wheat after a relatively dry period this week. The main concern will likely continue to focus on southern/eastern areas with long-term moisture surpluses (1/4 of corn/soy and at least 1/3 of wheat), particularly Buenos Aires. Weekend rains scattered across much of Brazil but favored central/northwest areas, including locally up to 7” in central/southwest Mato Grosso. A very active pattern will continue into early December (especially central/north), aiding corn/soy growth. While considered a relatively low risk, localized pockets of excess moisture will need to be watched for in Sao Paulo, southern Minas Gerais, Goias, and the Mato Grossos.

 

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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