HIGHLIGHTS

• MARKET TREND—Mostly firmer: CH: up $.02; SF: up $.05; WH: down $.0025; KWH: up $.0025.

·       MACRO.  Markets nervous-possible Middle East unrest should the U.S. decide to recognize Jerusalem as Israel’s capital .  ASIA—Much lower: Nikkei, -1.97%; Shanghai,-0.29%; Hang Seng, -2.14%.  EUROPE: Lower: DAX, -1.03%; FTSE, -0.17%; CAC, -0.65%. WALL STREET—Futures are lower—DOW, -49; S&P, -4.25; NAS, -30.50.  EXTERNALS: $ Index: -.039 @ 93.295; Gold: +$5.50 @ $1,267; Jan crude: -$0.40 @ $57.22/bl.  Del’y: SBM, 295; SBO, 262; C, 1,127; ETOH, 138; HRW, 164; SRW, 405

• T-storm Weather: Despite a few thunderstorms, below to much-below normal rainfall affects Argentina, South Brazil, and Paraguay over the next 10 days.  Occasional heat also develops from late-week forward across the northwest two-thirds of Argentina's growing belt and Paraguay, while areas to the east stay cool.  Heavy rain focuses on key areas of Center-West, North, Northeast and Southeast Brazil over the next 10 to 14 days, including the key states of Goias and Mato Grosso
• CH, up $.02 @ $3.5550; CK, up $.02 @ $3.6425.  Fund buying on Tuesday estimated at 2 K       
• SF, up $.05 @ $10.1350; SH, up $.05 @ $10.2550.  Funds: bot 6 SB, 6 SBM, 0 SBO.  Board Crush: $1.14, +$.03; LY, $.76 
• WH, down $.0025 @ $4.3230; WK, up $.0025 @ $4.4525.  The Funds were even inTuesday’s trade         

CORN/SORGHUM

• US. Census report released on Tue. pegged U.S. corn exports for October at 107 mbu vs. 143 mbu last year (-25%)
• T-storm Weather: Topsoil dryness is developing across South Brazil, but not subsoil level given rainfall was close to normal the last 30 days.  Full-season corn in Brazil becomes sensitive to moisture levels over the 2^nd half of December

·       Consultant: Brazil corn production estimate for 2017/18 is unchanged this week at 88.0 MMT vs. 98.5 MMT last year

·       Ethanol margins: $0.22 per gallon—down vs. $0.26 last week and well below $0.49 in 2016.  EIA report at 9:30 am CST

SOYBEANS/WHEAT

·       Consultant: Argentina soybean production is unchanged this week at 55.0 MMT.  Recent rains helped crops in some western areas, but could be classified as disappointing especially in the more eastern areas

·       T-storm Weather: Some thunderstorms occur in dry areas of Argentina Dec. 15-20, but only 0.50" to 1.00" is probable, meaning that many areas will have received only 25% to 50% of normal rainfall over the next two weeks

• ATI Research: Bias on near-term U.S. all wheat exports remains at 10-15 mbu per week
• T-storm Weather: In the U.S. very little or no rain occurs from Nebraska south over the next 10 days or longer

ENERGY

·       Weaker: CLF18, -$0.40 @ $57.22; EBG -$0.43 @ $62.43; EBG-QCLF, -$0.03; RBF,-.0156; NGF, +.008; HOF, -.0136

·       EIA Report Estimates (API): crude oil, -2.4 (-5.5); Gasoline, +1.7 (+9.2); Distillates, +1.0 (+4.3).  Pre-report estimates for ethanol production avg. 1.068 million barrels per day.  The avg. estimate for ethanol stocks is 22.11 million barrels.

·       On Tuesday, cash ethanol markets were mostly steady to higher: Chicago was quoted at $1.355, up $0.0025; Basis to Chicago—New York, +10 ¼; Gulf, +7 ½; Dallas, +4; Tampa, +19; and LA, +18

·       On Tue., ethanol RINs weakened: 2016’s dn 2 ¼ at 83-84 ½; 2017’s off 2 ¼ to 83 ½-85; & 2018’s eased 2 ¼ to 83 ½-85

·       The Jan RBOB/Jan ethanol spread gained $.0152 yesterday, widening +$.36060/gallon 

  LIVESTOCK/POULTRY                     &​nbsp;               

• Choice boxed beef values firmed 89-cents on Tuesday to $209.08, and are 45-cents higher vs. last week
• February live cattle futures on Tuesday closed at $120.525—the lowest settlement price for the contract since Oct. 17

·       USDA mandatory pork carcass cutout value increased 52-cents on Tuesday to $84.03, and is up $2.15 vs. a week ago 

• CME Lean Hog Index firmed $0.43 on Tue. to $64.35.  December futures eased $0.675 & are $0.075 below the index

Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather