We kickoff the day with Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Unemployment Rate at 7:30 A.M., Fed Williams Speech at 8:00 A.M., Baker Hughes Oil & Total Rig Counts at 12:00 P.M., and Dairy Products at 2:00 P.M.

Monster storm Hurricane Kirk looks like it will boomerang back in the Atlantic according to the latest cone by the National Hurricane Center, we are also watching Tropical Leslie moving at 5 knots, we will be watching the storm the next 5 days, Florida could get more rain and storm surge.

The Bureau of Economic Analysis reported that US new car sales in September were up 3% from August and unchanged from a year ago at 15.77 Mil vehicles. Car Sales were down 8% from a year ago at just over 3 million, while light truck and SUV sales marked the 3^rd consecutive month of year-over-year gains and were up 2% at 12.8 million vehicles. Cumulative light truck and car sales in the first 3 quarters of the year were less than 1% above 2022 but a 3-year high of 140 Mil vehicles. However, new car sales remain well below the pre-pandemic sale rate of 153 Mil cars.

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Central US Weather Discussion

Central US Pattern Stagnates into late October; Tropical Activity Confines to Florida:

The Central US forecast has extended a pattern of complete dryness into Oct 18^th, and for the remainder of the month, this only gets dislodge by a tropical event. There are hints that a major storm travels across south Florida Oct 9-11, but confidence in this outlook is low and there’s no sign any event travels deeper inland. A warm/dry October is anticipated. Harvest will be interrupted and both corn and soybean harvests are projected to reach 50% complete in the next two weeks. Close attention will be paid to soil moisture anomalies across the Southern and Central Plains, where wheat seeding reaches its peak between now and early November.  Abnormal dryness will expand further across OK, KS, NE, and CO amid abnormally warm temperatures.

Meaningful Rain Favors Argentina Next 7 Days; Brazilian Pattern Shift Forecast Oct 10-11:

Radar maps yesterday features scattered but potentially heavy showers in parts of northern Mato Grosso. Rain guage data is awaited, and widespread showers were absent. Otherwise, the outlook is consistent with prior runs. The EU model’s latest 7-day shows heavy (and needed) rain lies ahead for central and northern Argentina. This will allow corn and soybean seeding to accelerate after mid-October. Lite showers will move farther north into Sao Paulo. Additional scattered showers are probable in Mato Grosso next week. An outright wetter pattern change remains forecast across the northern half of Brazil beginning Oct 12^th . The overall forecast is improved amid better rain changes in in S Brazil and coming soaking precipitation in Argentina, but it’s critical that rain begins to fall on a near-daily basis in N Brazil next week.

China’s Macroeconomic Issues

Ag Resources (ARC) maintains the world of ag will be defined by volatility in crop year 2024/25, but lasting rallies will be limited to supply dislocations – as has been seen in Europe and Black Sea in summer/early autumn. The big-picturedemand driver remains absent, and China’s waning contributions to the global economy are a concern. This is most important for future world soybean demand. China’s economy is in trouble, and the core issue has been acceleration of population loss in recent years. The advent of China’s one-child policy in 1979 is now being felt considerably. Note also that the termination of China’s one-child policy in 2016 did little to boost population numbers. This is a generational issue. ARC also notes the recent expansion in Chinese exports has been a function of the market there clearing excess supplies at lower prices. It’s just difficult to see China being a major driver of growth of global food consumption. USDA’s Chinese food consumption forecasts is aligned with population with population contraction and slowing per-capita income growth. USDA projects China’s consumption of milk powders, beef, chicken, pork, and vegetable oils in 2024/25 to be down 2 MMT’s from last year. Chinese demand for food products jumped in 2020, but has since plateaued. India overtakes China in terms of economic importance. This bodes well for future wheat and vegetable oil demand, but it’ll be difficult to replace the recent surge in growth of Chinese soybean, corn, and dairy product imports. As such, the strategy into 2025 is to use weather-based supply issues to scale into forward cash sales. Amid positive seasonal price trends in autumn/winter, ARC desires to price most of 2024 and 2025 corn & soybean production prior to Jan/Feb.

World Corn Market Ends Weaker; South American Weather Forecast Improving, US Gaining Competitiveness in World Market:

CBOT corn futures were unable to score newer highs amid overbought charts and a probable expansion of rainfall in Argentina and southern half of Brazil. All eyes will be on rainfall in Mato Grosso beginning Oct 10^th, but a correction was needed. ARC maintains rallies in the short term will struggle at $4.35-44.40 as the US harvest accelerates. The Argentine crop is 14% planted, vs. 7% last year, and vs. 17% on average. Rain early next week will boost Argentine seeding progress in mid-Oct. Fair value is viewed at $4.05-$$.40 basis Dec CBOT corn. It’s difficult to be bullish amid solid early yield reports, but equally difficult to be bearish below $4.00 amid expanding US export demand. Export sales in the week ending Sep 26^th were at a 44-week high at 66 Mil Bu. Sales must average only 33 Mil to meet USDA’s forecast. Black Sea premiums continue to strengthen. Catch up on sales above $4.30 Dec, and $4.50 March.

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