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We kickoff the day with US Trade Balance, Exports, and Imports at 7:30 A.M., Redbook YoY at 7:55 A.M., Fed Barr Speech at 8:15 A.M., Fed Jeffrey Speech at 8:50 A.M., Fed Waller Speech and IBD/TIPP Economic Optimism at 9:00 A.M., Total Household Debt at 10:00 A.M., Fed Williams Speech at 11:00 A.M., 3-Year Note Auction at 12:00 P.M., Fed Logan Speech at 12:30 P.M., Consumer Credit Change at 2:00 P.M., and API Energy Stocks, LMI Logistics managers Index Current, and Used Car Prices MoM & YoY at 3:30 P.M.

ARC reports this morning US food inflation in September was 4%, and the average over the previous 12 months was close to 8%. While US food inflation remains historically high, food inflation on a global basis is in retreat. The Food and Agriculture Organization’s latest update on its world food price index , showed that food prices on a global basis in October averaged 10% less than a year ago, marking the 11^th consecutive month of a year-over-year decline in food prices, and the 8^th consecutive month of double-digit declines. Compared to a year ago, the dairy index was down 22%, the oils index was down 20%, the cereals index was 17% lower, and the meat index was down 3%. The sugar index is fast approaching the 2011 high on tightening stocks and reflects commodity fundamentals still matter. South American weather will see regional drought improvement in Argentina, but concerns rise with Brazil’s climate pattern with excessive heat and dryness in Northern Brazil and excessive rain returns to Southern Brazil. The South American market is worrisome to all participants. We have had a turnaround Tuesday on commodities today. Yesterday’s Crop Progress showed the US has harvested 81% of a corn and 91% of the soybean crop. Ohio and Pennsylvania are laggards in the corn harvest with progress of 45% and 46% respectively. The US soybean harvest is virtually completed. US winter wheat seeding advanced to 90% with 50% of the US crop rated good-to-excellent, up 3% from last week. Now we wait until Thursday at 11:00 A.M. with Crop Production USDA Supply/Demand and WASDE data with the funds position, any surprise, “Katy Bar the Door!” As I mentioned before, buckle up your chinstrap. As of Friday’s close the managed funds are estimated long 30,000 contracts of soybeans, again at Friday’s close, and 114,000 soybean meal, while holding big fund short in corn, wheat, and soybean oil. In the overnight electronic session, the December corn is currently trading at 473 which is 4 ¼ cents lower. The trading range has been 477 to 472.

On the Ethanol Front, Erin Voegele with Ethanol Producers Magazine reports, the USDA on November 1^st awarded $145 million in loans and grants to 700 projects under the agency’s Rural Energy for America Program (REAP). Projects at two ethanol plants are among those that will receive funding. One Earth Energy LLC was awarded a $1 million grant to support the purchase of Whitefox ICE system to increase the ethanol production at its Illinois-based dry-mill ethanol plant. According to the USDA, the project is expected to generate an additional 24.53 million gallons of ethanol per year, which is 1.8 million automobiles annually. Western Plains Energy LLC was also awarded a $1 million grant under the REAP program. That award will be used to improve an ethanol recovery system at the company’s Kansas-based plant. The USDA said the project will allow the facility to boost production by 48 million gallons per year, enough to fuel 6,534 automobiles per year. There were no trades or open interest in ethanol futures.

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