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Early Call 8:45am EST: Corn down $.02, soybeans down $.02, wheat down $.02.

Soybeans traded both sides of unchanged overnight before settling lower as the dollar

rallied after private U.S. jobs data was released. The dollar continues to consolidate

ahead of Friday's November jobs data, which is expected to set the table for a move on

interest rates by the Federal Reserve.

Grains: Corn and soybean futures advanced Tuesday thanks to hopes for increased

demand and short covering by investors. Wheat fell. Soybean prices rose to a five-week

high, gaining as investors closed out of bets on lower prices by buying futures, which

lifted the market. Investors were exiting their bearish wagers because of growing

sentiment that prices have fallen far enough, recently hitting a fresh 6 1/2-year low in

November. Buying in the soybean oil market also propped up oilseeds. Soybean oil

prices rose 2.3% on Tuesday, supported in part by the release Monday of the U.S.

Environmental Protection Agency's annual targets for how much biofuel must be mixed

into the nation's fuel supply. The federal agency raised its volume requirements,

suggesting more soyoil will be needed to meet biodiesel goals. The final EPA mandates

indicate that a lot of soybean oil will be used to make biodiesel next year, so people are

all bulled up on that. Soybean futures for January delivery rose $.08 1/4 to $8.89 1/4,

the highest closing price since Oct. 27. Corn prices rose to a one-week high, boosted by

investor short covering, which comes after prices tumbled in November. Corn prices

also were supported by EPA's ruling, which increased blending requirements for ethanol

and prompted hopes for increased corn demand, the main feedstock in the biofuel. Corn

traders figured the EPA announcement was friendly. The dollar, which fell 0.5% against

a basket of international currencies on Tuesday, further supported corn and soybean

prices. December corn added $.02 to $3.67, the highest closing price since Nov. 23.

Wheat prices fell to a three-month low, weighed down partly by improving conditions

of the nation's winter wheat crop. CBOT December wheat shed $.03 1/2 to $4.56 1/2,

the lowest settlement price since Sept. 3.

Daily Grain / Hogs Marketing Outlook Written by: Jim Gerlach

12/2/2015

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Our lead forecaster says that

ongoing dryness and wetness in

Brazil have the potential to

become more pronounced over

the next 10 days, though

scattered t-storms affect driest

areas Sun.-Wed. (Dec. 6-9), and

drying occurs over the same

period in wettest areas.

Sustained drying aids planting

and harvesting in Argentina, but

rain may eventually be needed

by mid-month and seasonable to

cool weather limits drying rates.

Quiet and mild weather

dominate U.S. livestock areas.

Over the last 30 days, soybeans

in northern Brazil were the

second driest since 2000, with

only 2002 drier. Over the same

period, southern Brazil

soybeans were the second

wettest since 2002, with only

2009 wetter. Southern Brazil

and Paraguay stay wet from t-storms through Sat. and again later next week. Dry-hot

weather will dominate northern Brazil into Sat., followed by scattered t-storms Sun.-

Wed. At least several days of drier and hotter weather potentially return to northern

Brazil after next Wed. (Dec. 9). CWG (www.commoditywx.com) noted in the attache

graphic that relying on the U.S. model in the 11-15 day period hasn’t been a good idea

as model performace has had a dry/hot bias. Mild and dry weather dominate U.S.

livestock for 7 to 10 days, followed by seasonable cooling.

Ukraine’s 2016 wheat crop is now sailing into uncharted waters given both the

significantly missed planting target and a record percentage of crops in poor condition.

Ukraine, the world's sixth-largest wheat exporter, has faced one of the most challenging

winter planting campaigns this year than ever before in the wake of a historic drought

that set in during late summer. As a result, planting progress and plant emergence has

been considerably behind normal pace all along, and crop health has suffered

immensely. The outlook was rather gloomy as of early November, but hope still

remained that Ukrainian farmers could boost winter wheat area throughout the month

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with help from favorable weather, which would also presumably help improve overall

plant conditions. Analytical firm SovEcon is predicting that Russian total grain

production will reach 100mmt, down from 103.7mmt last year, and 105.4mmt the year

before. Currently the crops are overall in better condition than they were last year and

this winter is expected to be mild with plenty of precipitation. The Russian agricultural

ministry has not released any official estimates for the 2015/16 crop year yet.

RJO’s director of research Rich Feltes echoed what I was saying yesterday about why

the market is more apt to rally than decline into the end of the year. In the absence of

fresh fundamentals, ag markets are more susceptible to structural factors and on that

score, managed fund ag shorts are modest and growing, an open invitation to bottom

picking despite the over-riding negative factors including favorable South American

weather, slack demand, a strong dollar, more free flowing Argentine exports, and a

doggy CRB index. The only commodities up on the year are white

(sugar/cotton/rice/cotton/cocoa), while only gains in Nov were rice/OJ/lumber/$/soy

oil/sugar/cocoa), hardly a ringing endorsement for commodities. More crushers eased

U.S. soy basis yesterday than those that advanced basis, a sign of thinning margins and

expectations for an acceleration in farmer selling next month. U.S. corn is getting

competitive in the world export market, although this is no sign of trouble as yet for

2016 Argentine or Brazilian corn crops. Soybean oil share, correcting today after

posting new high yesterday, will likely see strong support on breaks. Row crop prices

are entering a zone where further gains will ignite stepped up farm selling. We think

upside follow-through is limited.

Adding to what Rich is saying, taking a closer look at Monday afternoon’s CFTC report

revealed another boost in speculators’ net short position in ag commodities. As of last

Tuesday, a record short position worth 51,000 contracts was established in KC wheat.

Funds were outright short 83,000 contracts of soybeans, which is near the early summer

low, and just over 150,000 contracts of corn. Altogether, funds were short 400,000

contracts in corn, wheat, beans, hogs and cattle, which is the highest of such since

the supplemental report began in 2006. Those short futures positions soften

somewhat when netted against outstanding options positions, but in either case, what we

really have is an opportunistic trade community trying to lean on the biggest player in

the house (fund managers) and force them into cover shorts in low volume/thin holiday

trade. Whether or not that will work/happen remains an open question, but any such

action would prove a gift to under marketed producers holding large stocks of grain and

soy. Producers need to be in position to take advantage of any rally into year end,

specifically Mar corn above $3.95 and Jan beans above $9.00. With final South

American and all of the U.S. 2016 growing season lies ahead of us, use options to limit

your downside exposure as we move into the new year.

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Looking WAAAY ahead, with U.S. corn producers looking for any edge to prop up

projected 2016 balance sheets that are projecting losses, crop specialists point out that

early planting can be one of the best ways to increase corn yield without incurring

additional costs. Planting corn earlier guarantees the best yield potential. However,

environmental factors and management also enter the picture, but these also tend to take

a bigger toll the later you plant. Generally, early corn planting is defined as pushing the

date up by at least 10 days from the traditional planting window. A report by economists

from the University of Illinois says early planting works, but there's more to the story.

Research conducted by University of Illinois agronomist Emerson Nafziger shows

planting before April 25 produced the highest overall yield, but it's not necessarily a

yield bump. Planting between April 25 and May 15 resulted in modest yield penalties as

time progressed. Planting after May 15 resulted in the most severe yield penalties. This

is not news to growers, and that's why they make every effort to get planters rolling as

early as possible. In other words, the economists found that the yield penalty is larger

for planting later than are the gains for planting early. The point is that early planting

guarantees you the best yield potential in a field. As planting is delayed, penalties

worsen and often significantly.

The authors agree that timely planting clearly influences corn yield prospects, but they

emphasize that other factors probably play a bigger role in final yield. Purdue

University agronomist Bob Nielsen is noted for stating: "The statewide (Indiana)

statistical data suggest that planting date accounts for less than 25% of the variability in

statewide yields from year to year." Nielsen noted that yield potential declines not just

because of the delay in planting, but the introduction of additional stress factors such as

a shorter growing season, pollination when it is hotter and drier and possible increases

in pest pressure. He points out that growers have to remember that yield loss associated

with late planting should be attributed to two things; yield loss due relative to the

maximum possible yield at the ideal planting date and yield loss due to additional

stresses that are incurred. In 2015, some corn was planted in April on the early side and

easily weathered the heavy spring rainfall events. We also had corn planted far outside

the April 20 to May 10 window that suffered more from too much rain in June and early

July rather than just an unfortunate delay in planting. Nielsen said growers also need to

understand the consequences of rushing the season. "Adequate moisture and soil

temperature and good seed-to-soil contact sound easy, but growers find it hard to wait,

especially when they have a lot of acres to cover, especially if the previous season didn't

cooperate," Nielsen said. "I don't care when you plant, just recognize the risk and

consequences of cold soil temperatures."

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U.S. farmers are getting one piece of good news regarding the 2016 corn crop. Fertilizer

prices continued to drift lower the fourth week of November 2015, with some fertilizer

retail prices at or are closing in on historic lows (going back to 2008 anyway). All of the

eight major fertilizers slipped lower compared to a month earlier, according to a DTN

weekly survey, but none were down significantly. DAP has an average price of $543 per

ton, MAP $556/ton, potash $422/ton, urea $397/ton, 10-34-0 $580/ton, anhydrous

$624/ton, UAN28 $286/ton and UAN32 $325/ton. On a price per pound of nitrogen

basis, the average urea price was at $0.43/lb.N, anhydrous $0.38/lb.N, UAN28

$0.51/lb.N and UAN32 $0.51/lb.N. While fertilizers and other inputs have been slow to

adjust to the crash in commodity prices since 2012, some are breaking new ground:

Surveys of national average retail fertilizer prices since November 2008 show lows for

most fertilizers were seen in either 2009 or 2010, with three lows set in November 2009

alone. However, there were a couple exceptions. One would be potash, which is at the

lowest price in more than seven years. Last week's price of $422 per ton is now an all-

time low for potash (since data began to be collected in 2008). Before this recent move,

the lowest price in our dataset occurred in August 2010, with an average of $467 per

ton. Another fertilizer nearing a an all-time low would be urea. The nitrogen fertilizer,

with an average last week of $397 per ton, dropped below $400 per ton for the first time

since June 2009 when the average price was at $390 per ton. The all-time low for urea is

$375 per ton in October 2009. The remaining six fertilizers all have current retail prices

which will have to move considerably to reach record lows.

DAP, with an average price of $543/ton now, has a seven-year low of $362/ton reached

during the second week of November 2009. MAP, with an average price of $556/ton

now, reached its low of $386/ton the first week of November 2009. 10-34-0, with an

average price of $580/ton currently, is nowhere near its low of $381/ton seen the fourth

week of December 2009. Anhydrous, with a current price of $624/ton, has a low of

$410/ton seen on the first week of November 2009. UAN28, with the current price of

$286/ton, has a low price of $199/ton from third week of August 2009. UAN32,

currently at $325/ton, has a low of $231/ton seen the first week of September 2009.

With retail fertilizer moving lower in recent months, only one fertilizer is now higher

compared to a year earlier. 10-34-0 is 3% higher than last year. The remaining seven

nutrients are now lower compared to retail prices from a year ago. DAP is now 6%

lower, MAP is 7% less expensive and UAN28 is 11% lower. Anhydrous, potash and

UAN32 are all 12% less expensive while urea is 19% less expensive from a year earlier.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly.

On the demand front, the cost of U.S. transportation remains relatively cheap. Spot

barge freight was 280% of tariff and December freight was down to 285%. Corn barges

were unchanged to a bit higher. Dec corn barges were bid $.50 over with offers at $.53,

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last half Dec barges were $.50 on $.54, Jan was bid $.48 over and Feb had a buyer at

$.52 over. The eastern corn basis remains a bit defensive as ethanol producers have

started to back away from the market. Farmers sold more corn on the rally, especially

reseller interest. Premiums in the barge market for soybeans were unchanged. Last half

Nov barges were bid $.62 over, Dec barges were bid $.64 over and Jan was $.65 on

$.67. Dec CIF beans traded to $.65 over Jan, with Jan also trading at $.65 over. China

reportedly picked up a few cargoes for January shipment as crush margins showed

better there. Farmer selling picked up on the futures rally especially to the west. The

rally has allowed crushers to extend ownership for much of the month of December.

MN/IA oymeal nearby was offered at $28 under Dec and many crushers are now rolling

from the Dec to the Jan. Barge meal values were steady at $13 over Dec bid on $15 over

Dec on the nearby. The IL market was called $3 under Dec. Crush margins were

showing $.50-$.75 a bushel.

In export-related news, the USDA announced a 124,000mt sale of 2015/16 soybeans to

an unknown this morning. Traders continue to debate just how much hoarded grains

Argentine farmers possess. According to Ricardo Echegaray, the head of the AFIP tax

agency, farmers have about $6 billion worth of soybeans available for export, or

16.8mmt, $3.4 billion worth of corn, or 20.1mmt, and $2 billion worth of wheat, or

about 9.5mmt. Echegaray said, “This is not an estimate, these are hard figures that we

have from the declarations of each farmer.” It is being reported that Asian countries

have all but halted corn imports in anticipation that Argentina’s new export policy will

lead to cheaper corn. Rain-induced shipping delays continue to plague Brazilian corn

exports as port facilities are uncovered and do not operate while raining. El Nino-related

rains have been a consistent feature in southern Brazil, leaving the port of Paranagua to

not load any corn for 14 days in November. Shipping delays continue to run around 40

days and corn exports are expected to remain heavy into February in order to work off

the backlog of delays currently in place. Russian wheat exports in November are likely

to be 1.9-2.0mmt based on preliminary phytosanitary certificates issued for the Nov 1-

27 period, and would be down from October exports of 2.6mmt. Wheat exports since

the start of the 2015/16 marketing year on July 1 have been 12.0mmt, down 11% from

last year. India continues as a bullish background factor for vegetable oil as rapeseed

crop worries remain and ample port stocks appear to be getting absorbed. The soyoil

import margin recovered some this week to $5 negative in the spot market, $16 negative

for December and again $4 positive for January. With Russian sanctions placed on

Turkey, analytical firm UkrAgroConsult is anticipating a boast in Ukrainian exports to

the country. Over that last 5 years, Turkey has cut its Ukrainian exports by 50% and last

year only 2.7% of all Turkish wheat imports came from the Ukraine.

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Hogs: Cash hogs are called steady to narrowly higher as buyers are signalling a low has

been posted in cash markets. Although negotiated receipts appear to be tightening, chain

speed remains fairly aggressive. We're likely to fall below the biggest weekly total

posted before Thanksgiving (i.e., 2.4 million), but probably not by much. Peoria is

called steady-firm after closing steady at $30.00 on Tuesday. The national bid rose $.32

to close at $51.65 while the IA/MN bid gained $.42 to close at $52.70. Bids for

livestock have remained in a narrow range in the past week, following a weeks-long

slide, indicating to some market watchers that demand could be turning a corner. Prices

for hogs have fallen dramatically from this time last year due to a swell in supplies,

spurring hopes that retailers will stock up on loins and other pork cuts for the end-of-

year holidays. Weekly kill is up 2.1% vs. a year ago and early projections for Saturday's

load of hogs to be processed total 235,000 head, down 140,000 hogs from the slaughter

last weekend, when plants were adding extra shifts to make up for the shortened holiday

week of production. Last week, U.S. pork output was estimated to have climbed to

454.0 million pounds, up 6.3% from this time last year, and total year-to-date

production has surpassed 2014 levels by 7.1%. The total number of hogs processed last

week exceeded the same period last year by 7.1%. Cutout values did slip $.89 to $73.01

on excellent movement of 477 loads. Estimated packer margins were $36.12/head for

non-integrators and $4.76/head for integrators vs. $39.93 and $7.70 the previous day.

February lean hog futures blasted to a sharply higher close on Tuesday. The action is a

bullish short-term signal as the contract closed above its 20-day moving average. The

lean hog contract closed just above $59.65, the Nov. 23 daily high and sustained gains

above that ceiling are needed to keep the bulls in control. The 40-day moving average

line is a bullish target and resistance at $62.42. Initial support lies at Tuesday's low at

$57.00, with a stronger floor at $55.77. The long-term trend is bearish, but a short-term

bottom has formed on the daily chart at the Nov. 17 low at $53.97.

Hog futures rallied on demand optimism after selling across the livestock markets

pushed prices down on Monday. December lean hogs picked up 1.525 cents to 59.95

cents a pound. Most active hog futures for February advanced 2.975 cents to 59.775

cents a pound. The late-year rally in lean hog futures continued yesterday with most

contracts nailing another round of triple-digit gains. Spot Dec stretched as high as $60

and notched its best close since October 29. Hog futures rallied by the exchange

imposed daily limit before trimming gains amid strength in the cash markets. Tuesday's

cash market reflected another positive combination of higher live bids and sales on one

hand and relatively light receipts on the other. This suggests the country firming will be

sustained, at least in the short run. Cattle futures reversed early session losses to end

higher on Tuesday as profit-taking subsided and traders focused on signs of

strengthening demand. December live cattle futures picked up 2.05 cents to $1.3210 a

pound. Cattle futures for February advanced 2.275 cents to $1.34625 a pound. Feeder

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cattle futures for January rose 1.65 cents to $1.6440 a pound. Beef prices have tumbled

since the start of the year, leading some to suspect that after the Thanksgiving holiday

season, retailers will stock up on steaks and roasts. Demand optimism was bolstered

after cattle prices in the cash markets last week traded steady with the prior week's

trend, following a weekslong slide in cash prices. As profit-taking eased midday

Tuesday, investors searched for fresh indicators of buying interest in the beef market.

Analysts cautioned that despite the steep drop in beef costs facing grocery store and

restaurant buyers, prices for most beef cuts remain significantly higher than those for

pork or poultry, which could curb gains ahead.

Weather: The U.S. and European models are in fair to good agreement today.

However, the European model is somewhat deeper and a little faster with a trough that

moves over the northeast U.S. and into the Atlantic during the early and middle part of

this period and the U.S. model is somewhat deeper and further east with an upper level

trough and surface storm that moves over the western U.S. and into the central U.S. at

the end of the period. Today's U.S. model is favored as it concerns the trough/low over

the northeast U.S. and in the Atlantic during the early and middle part of the outlook

period, and the European model is favored as it concerns the trough moving over the

west and central U.S. at the end of the period. The mean maps at 8-10 days continue to

feature above normal heights over central and east Canada and northeast U.S. and also a

strong trough covering the Gulf of Alaska and pushing into western North America.

This is mostly an above normal temperature pattern, however late in the period it may

turn somewhat cooler through the west and central U.S. The precipitation chances may

increase with time due to the Gulf of Alaska trough moving into western North

America, but this is probably just beyond the 10 day forecast for the most part.

Dry weather dominated most of the Argentine growing regions yesterday. Rains in

Brazil were limited mainly to Parana, MGDS, Sao Paulo and Mato Grosso, with totals

generally less than .30” most common. Temps were in the 80’s for highs in Argentina,

with 80’s and a few 90’s in Brazil. Close to average rains will fall across most of the

Brazilian growing regions in the next 5 days, with some above average totals across the

south. The 6-10 day period sees average to above average rainfall for most of the

Brazilian growing regions as well. Dry weather will dominate much of the Argentine

growing regions through the rest of this week, the weekend and into the first half of next

week, with most of the meaningful activity confined to the far south, west and north.

Ideas for the end of next week are still mixed. Temps will run near average in most of

the Argentine and Brazilian growing regions in the next week to ten days.

Rains and snows fell across the eastern sections of the Dakotas, NE into MN, WI and

IL. Most snow totals were around 1-3” or less, with rains generally under .25”. Things

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were fairly quiet across the rest of the Plains and Midwest yesterday. Temps ran near

average in the Plains, with highs in the 40’s and 50’s in the southern Plains and lows in

the 20’s and 30’s. Highs in the Midwest were in the 30’s and 40’s in most cases. The

current system will finish up across the Great Lakes region today, with some light rains

and snows there. The rest of the Midwest and all of the Plains will be fairly quiet today

and then things will be fairly quiet in the Plains and Midwest for the rest of this period.

Things also look to be mainly dry in the Plains and Midwest in most of the 6-10 day

time period, with the potential for a system to develop some precip across the Plains late

in the period. Temps will be warming to average to above average across the Plains and

Midwest for the end of this week, the weekend and much of next week.

North American Crop Impact: A drier period for at least the next 7 days will improve

conditions for transport and will favor winter wheat in the Midwest/Delta, especially

fields that may have been flooded by recent rains. There is no significant threat of

damaging cold weather in the wheat areas. A drier period with warmer temperatures

will favor livestock in the feed lots of the southwest Plains. Warm temperatures and

recent moisture favor the HRW wheat crop.

Global Weather Highlights: Episodes of rain and showers will favor development of

corn and soybeans from RGDS northward to MGDS, Brazil. Some delay to planting is

possible. Episodes of scattered to widely showers and thundershowers help improve

conditions for soybeans in Mato Grosso as well during this period. However, in this area

it may be hot at times, which could stress early developing soybeans. A drier, warmer to

hotter trend is expected in Argentina during the next 7 days. Soil moisture and

temperatures will favor developing crops during this period and provide mostly

favorable weather for planting. Another significant snow and rain event moved over

Ukraine, South Russia and the Black Soils region during the past 24 hours. Precipitation

may help ease drought conditions somewhat, but is unlikely to improve the conditions

of winter grains. However, it has been reported that grains in South Russia have

improved due to the increase in fall rains in that location. A variable temperature pattern

continues with some warm and some cold periods. The coldest weather does not look to

be damaging even to unprotected winter grains. However, a cycle of freeze-thaw has

been know to cause some problems for winter grains. Hot temperatures increase stress

to early planted corn and developing sugarcane in South Africa. However, we did see a

few thundershowers yesterday, with the chance for scattered showers and

thundershowers today or during Thursday into Friday as well.

Macros: The macro markets were mostly weak as of 9:00am EST, with Dow futures

down 0.1%, the U.S. dollar index is up 0.4%, crude oil is down 1.9% and gold is down

0.6%. The S&P 500 on Tuesday rallied to a 3-week high and settled 1.07% higher, the

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DJIA gained 0.95%, and the Nasdaq gained 1.11%. In the bizzaro world that weaker

economies are bullish stocks, bullish factors included speculation that any Fed interest

rate hikes will be slow and shallow after the Nov ISM manufacturing index

unexpectedly fell 1.5 to a 6-1/3 year low of 48.6, weaker than expectations of +0.4 to

50.5, and speculation that the PBOC will expand stimulus after the China Nov

manufacturing PMI unexpected fell 0.2 to a 3-1/4 year low of 49.6 .The Fed today will

release the Beige Book survey of the economy ahead of the Dec 15-16 FOMC meeting

in two weeks. Any indication of an improvement in the economy since the Fed's last

Beige Book report would encourage the Fed at its Dec 15-16 meeting to raise interest

rates. The Fed's last Beige Book report, released on Oct 14, said that reports from the

twelve Fed districts pointed to "continued modest expansion in economic activity during

the reporting period from mid-August through early October." The report went on to

say, "A number of Districts cite the strong dollar as restraining manufacturing activity

as well as tourism spending. Business contacts across the nation were generally

optimistic about the near-term outlook." The market is expecting today's Q3 non-farm

productivity report to be revised higher to +2.2% from the last estimate of +1.6%. The

upward revision is expected to stem from the recent upward revision in Q3 GDP to

+2.1% from +1.5%, which boosted the output numerator in the productivity ratio. U.S.

productivity continues to be weak, which is negative for corporate profits and employee

real wages. U.S. productivity has averaged only +1.0% over the last eight quarters, far

below the post-war average of +2.2%. The market consensus for today's weekly EIA

report is for a 900,000 barrel decline in crude oil inventories, a 1.5 million rise in

gasoline inventories, a 500,000 rise in distillate inventories, and a 0.5 point rise in the

refinery utilization rate to 92.5%. If crude oil inventories in today's EIA report show the

expected report of -900,000 barrels, that would snap the string of 9 consecutive weeks

of gains. U.S. crude oil inventories should have already flattened out due to rising

refinery activity, but have instead continued rising, thus worsening the U.S. oil glut.

U.S. crude oil inventories are currently 32.5% (120 million barrels) above the 5-year

seasonal average. Product inventories are

already ample with gasoline inventories

4.1% above the 5-year seasonal average

and distillate inventories are a hefty

12.7% above average.

Private-sector payrolls increased more

than expected in November, the most in

five months and the latest indication of

steady U.S. job growth. Private payrolls

in the U.S. rose by 217,000, said payroll

processor Automatic Data Processing

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Inc. and forecasting firm Moody's Analytics. The report is based on data collected from

ADP clients in addition to lagged government data. Economists surveyed by The Wall

Street Journal expected an increase of 192,000. Meanwhile, the October gain was

revised up to 196,000 from 182,000. "Job growth remains strong and steady," said Mark

Zandi, chief economist of Moody's Analytics. The November increase was thanks to the

service sector, where firms added 204,000 positions--the most since June and up from

174,000 in October. A rebound in professional- and business-service hiring powered the

rise. Firms in other industries also added workers. Construction and manufacturing,

weak spots of late, added a combined 22,000 jobs. Small businesses added the most

employees, though medium and big businesses also added solid amounts of workers.

The ADP report comes ahead of the Bureau of Labor Statistics's employment-situation

report, due out Friday morning. ADP lags behind the government's initial private payroll

estimate by a month. In October, the initially-reported ADP figure fell 87,000 short of

the BLS number; in September, ADP came in 81,000 ahead of the government's figure.

Overnight, Bloomberg News reported that the euro fell and European stocks gained as

inflation data that fell short of analyst estimates kicked off three days of economic

events likely to set the course for global markets into 2016. Europe’s 19-nation shared

currency approached its weakest level since April and the region’s equities rose toward

a three- month high as the consumer-price data boosted the argument for extra

monetary stimulus when the European Central Bank meets this week. The yield on 10-

year U.S. notes climbed from a one- month low before speeches by Federal Reserve

Chair Janet Yellen and U.S. jobs data. Crude slipped before the Organization of

Petroleum Exporting Countries sets output targets on Friday. Investors are focused on

the prospect of further divergence in global monetary policy amid speculation the ECB

will expand stimulus just as the Fed moves closer to liftoff. Yellen, who has been at

pains to emphasize the Fed’s gradual approach to normalizing interest rates, will

discuss the economy twice in two days. OPEC nations are also gathering in Vienna this

week and while Saudi Arabia, its biggest producer, has pledged to listen to other

members, the group has shown few signs of trimming output even as prices tumble.

The euro dropped 0.4 percent to $1.0589 at 11:09 a.m. London time. The Stoxx Europe

600 Index rose 0.5 percent after a 0.3 percent loss on Tuesday. West Texas Intermediate

crude declined 1.3 percent to $41.32 a barrel Treasury 10-year note yields increased

two basis points to 2.16 percent. Euro-area consumer price growth was unchanged at

0.1 percent in November, missing analyst forecasts for a 0.2 percent increase. With

ECB President Mario Draghi pledging to do what it takes to reignite inflation in the

region’s economy, analysts are predicting a further reduction in the area’s deposit rate

Thursday, and some also see an expansion of the bank’s asset- purchase program. The

euro has weakened more than 12 percent against the dollar this year as the ECB

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implemented quantitative easing to stimulate the economy, while the Fed moved closer

to raising interest rates for the first time since 2006. It touched $1.0558 on Nov. 30, the

weakest level since April 14. The Bloomberg Dollar Spot Index, a gauge of the U.S.

currency against 10 major peers, was up 0.2 percent after slipping 0.4 percent on

Tuesday. The yen weakened 0.2 percent to 123.16 per dollar. Australia’s dollar was

little changed after third-quarter gross domestic product expanded more than

economists had projected. The won retreated 0.5 percent. Most industry groups on the

Stoxx 600 rose. The index has rebounded 14 percent from its low in September in

anticipation of further stimulus to be announced by the ECB. Investors have been so

confident that they haven’t seen the need to hedge.

Oil fell for the third time in four days. Saudi Arabia will consider all issues at the

Friday gathering and listen to the concerns of other group members, Oil Minister Ali al-

Naimi said. U.S. crude inventories probably declined for the first time in 10 weeks, a

Bloomberg survey showed before Energy Information Administration data Wednesday.

Copper declined after a report on Tuesday showed U.S. manufacturing unexpectedly

shrank at the fastest pace since 2009. The metal for three-month delivery slid 0.8

percent to $4,596.50 a metric ton in London, retracing most of an advance the previous

day. The MSCI Emerging Markets Index dropped 0.3 percent, after rising the most in

almost two weeks on Tuesday. India, South Africa and South Korea were among

markets that declined. The Shanghai Composite Index climbed 2.3 percent, the most in a

month, after changing direction at least seven times in the morning before rallying in

the last hour of trading. The central bank stepped up cash injections via open-market

operations on Tuesday as the restart of new share sales drove demand for funds. Hong

Kong’s Hang Seng China Enterprises Index increased 1 percent. Turkey’s lira gained

for a third day, advancing 0.4 percent. NATO said on Tuesday it will bolster Turkey’s

air defenses, a week after the country shot down a Russian bomber that strayed over the

border while on a mission over Syria. The currency has gained this week following a

European Union pledge of financial aid to help contain a refugee crisis.

Summary: Soybeans led the grains yesterday, climbing to its highest level since late

October driven in part by technical buying and a positive take on the EPA’s updated

2016 bio-diesel mandate. Jan soybean oil traded to its highest level since mid-August,

with volume in soybean oil late in the day higher than soybeans. However, soybean oil

bulls may be jumping the gun. Reliable trade sources indicate low odds of a producer

bio-diesel credit passing this year, which some analysts believe could trim Oct 1, 2016

U.S. soyoil stocks below 1.0 billion lbs vs. the USDA’s Nov forecast of 2.295 billion

lbs and Oct 1, 2015 stocks of 2.030 billion lbs. Wheat fell and corn was caught in the

middle of the soybean/wheat tug of war. Corn RIN’s surge to as high as $.83-$.85

Tuesday vs. $.60 Monday amid an increase in biofuels mandated by the EPA. Fresh

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fundamentals are lacking amid no change in favorable South American weather, a

slowing pace of year-end U.S. export sales, improving U.S./FSU wheat prospects,

prospects for additional dollar gains and a reluctance to own commodities amid poor

Chinese economic updates. Looking ahead, further gains are likely to be muted by

stepped up selling by farmers, who know that in the absence of adverse South American

weather, the next chance for a substantial board rally will not occur until the 2016 U.S.

growing season gets underway. Long range climatology forecasts from CWG

(www.commoditywx.com) suggest slightly better than 50/50 odds (56%) of a warm/dry

2016 U.S. summer based on the assumption of a transition to La Nina. However,

advanced autumn field prep, low odds of a wet planting season (except for the central

third of the Corn Belt) and better than average sub-soil moisture reserves would mitigate

potential warm/dry stress next summer. Ultimately, the undersold U.S. farmer, record

global corn/soy/wheat supplies and a shift in Chinese corn support prices will

collectively dampen anticipatory 2016 U.S. drought buying until/unless adversity

unfolds.

January soybeans vaulted higher again on Tuesday, as the contract took out the Nov. 2

high at $8.91 intraday. The near-term trend outlook has turned positive in recent days

and a minor floor has been confirmed on the daily chart. In the very short-term,

however, soybeans are showing signs of becoming technically overextended, trading

just above the upper daily Bollinger Band line at $8.87 on Tuesday. The market is

vulnerable to little "backing and filling" following the recent strong gains. Soybeans hit

their first bullish objective at $8.91 on Tuesday. The next bullish target lies at $9.16, the

Oct. 22 swing high. On the downside, support points are seen at $8.83 1/4 and then

$8.70 1/4. March corn pushed higher Tuesday, amid follow-through buying in the wake

of Monday's bullish outside day. The corn contract closed above its 20-day moving

average line on Tuesday, for the first session since early October, which is a bullish

short-term signal. The corn contract needs to sustain gains above the 20-day moving

average to keep the positive near-term trend bias intact. The longer-term trend for corn

is bearish. But, in the short-term, a minor bottom has formed on the daily chart at the

Nov. 16 low at $3.64 1/4. The corn market is moving higher in a minor counter-trend

corrective phase. A bullish target and resistance point is seen at $3.76 1/2, the Nov. 10

daily high, and beyond there the 40-day moving average line is an objective. Tuesday's

low at $3.71 is minor support.

A/C Trading Co. does not accept orders to buy or sell by e-mail, text or any other form of social media. This material has been

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