We kicked off the day with CB Leading Index MoM at 9:00 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Crop Progress, Net Long-term TIC Flows, Foreign Bond Investment, and Overall Net Capital Flows at 3:00 P.M.

Spot crude oil since late summer has followed normal seasonal trends lower, and major price recoveries are unlikely until Mar/Apr. This year’s correction has been exasperated by recent and probably upcoming hikes to OPEC output and rising odds of regional supply gluts in calendar year 2026. ARC’s bet is that spot crude equilibrium in a range of $50-$55, which helps fuel costs globally but works against future upward revision to biofuel blend rates in US, Brazil, and Asia. The world crude oil glut as measured by the EIA is estimated to reach 4.0 Mil barrels daily in early 2026. This is the largest supply glut since COVID. And expanding OPEC+ and US production looks to add to the glut. A drop to $50 WTI is forecast.

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South American Weather Pattern Update

South American Forecast Slightly Wetter in Brazil Next Five Days; Mix of Rain & Sun Favorable for Spring Seeding:

The best performing EU and AI models are slightly wetter in Mato Grosso into early next week and slightly wetter in northern Argentina in the 6-10 day period. The South American pattern will be defined by a favorable mixture of rain & sun in which keeps soil moisture stable but allows for rapid seeding progress into the final days of October. Rainfall of 1-3” will impact Parana, Mato Grosso do Sul & Mato Grosso in Brazil for another 5 days. Drier weather follows. Heavy rainfall of 1-2” is forecast across all of Argentina that may surprise global grain market amid widespread positive soil moisture anomalies. There will be no concern over potential La Nina-based dryness there until December. Soybean seeding in Mato Grosso has reached 44% complete, vs. 25% a year ago in mid-Oct and vs. 49% on average. Seeding progress next week is forecast to reach 62-66% complete, which keeps harvest on track for tha last half of January. Winter corn seeding will follow during February with the seeding pace ideal for mid-October.

Central US Weather Pattern Discussion

Rain Added to Midwest/Delta in 8-14 Day Period; Welcomed Soil Moisture Boost Ahead:

Rain added to Midwest/Delta and Southern/Eastern Midwest after October 24^th. EU, GFS, and AI models are in broad agreement that rainfall of .50-2.00” favors the Delta region and large parts of MO, IA, IL, and IN Oct25-Nov1, which helpfully stabilizes river logistics if verified. NOAA’s projected two-week change in soil moisture is positive. An easing of what’s become severe to extreme drought east of the Mississippi River lies ahead. Near term, heavy shower activity impacts MO, IL, IN, OH, and MI this weekend. Totals there are pegged in a range of 1-2”, with locally heavier totals possible in northern IN & MI. Corn harvesting pauses, but major disruptions to fieldwork are unlikely as dryness and relative warmth will be widespread Oct 20-27^th with another potent storm due around Oct 27^th.

Corn Comments & Analysis

Corn Recovery Pauses at Chart Resistance; Harvest to reach 60-65% :

Dec CBOT corn ended higher, but scoring new recovery highs failed to spark new bullish enthusiasm. Basis levels have performed well on a regional basis, but there will be no shortage of supply as ARC estimates producers will have harvested 10.3-10.5 Bil Bu on Sunday. This exceeds the previous year by 600-900 Mil Bu. Keep in mind the US must find 15.8-16.2 Bil Bu of demand in 2025/26. Rallies will continue to be rewarded, with Dec above $4.25 and March above $4.45 targeted. US end stocks stay above 2.0 Bil Bu even assuming yield as low as 178 BPA. Choppiness persists until US yield and South American weather in December are known – but there’s no fundamental reason for lasting bull trends. ARC’s longer term concern is that Dec’26 holds some 40-60 cents of premium if major world weather is avoided. Ukrainian fob premiums are in retreat as drier weather in late Oct speeds harvesting there. And record Argentine and Brazilian corn crops in 2025/26 will sap US exports. Argentine fob wheat is priced at just $7/MT premium to Gulf corn for December. Peg $4.40-$4.45 March corn for new sales.

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