We kicked off the day with Business Inventories, Retail Sales MoM & YoY, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Retail Sales Ex Autos MoM, Continuing Jobless Claims, Jobless Claims 4-Week Average, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, Philly Fed Prices Paid, and Philly Fed Prices Paid, and Retail Sales Ex Gas/Autos MoM at 7:30 A.M., Industrial Production MoM & YoY, Manufacturing Production MoM & YoY, and Capacity Utilization at 8:15 A.M., Housing Market and Retail InventoriesEx Autos MoM at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks and Fed Goolsbee Speech at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Dairy Products Sales at 2:00 P.M.,Net-long-term TIC Flows, Foreign Bond Investment, and Overall Net Capital Flows at 3:30 P.M.

Interest rates declined ahead of the Fed’s September non-emergency– (But historically large) rate cut and bottomed out that same week. The average 30-year Mortgage Rate has been moving higher and rose to a 9-week high last week of 6.52%. This follows the yield on the 10-year treasury, which has been above 4% for 2 consecutive weeks for the first time since July. Mortgage demand fell 17% last week and was down 22% from the September high about the Home Affordability Index from the NAR. An index of 100 reflects that the medium home price is affordable to the medium US income, while higher figure reflects increased affordability. The latest data for August was below 100 below 100 for the 5^th consecutive month.

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South American Forecast Wetter in Key Areas in Argentina; Brazilian Monsoon Performs Next 10 Days:

The forecast has added rainfall to heavy producing areas of Cordoba, Santa Fe, and northern Buenos Aires in Argentina in the 6-10 day period. Accumulation of 1-3” projected, and if realized Oct 1-25 rainfall in C Argentina will match the longer term average for the month. The arrival of Brazil’s monsoon was inevitable in October. But it’s Argentine weather that outperformed expectations given the development of La Nina. Any concern of moisture in Argentina must be delayed until December. Otherwise, scattered showers impact C & N Brazil on a near-daily basis beginning tomorrow. This pattern last into late month. Net builds in soil moisture will be widespread. Regular rainfall in C & N Brazil is probable throughout the next 30 days as the monsoon maintains it’s strength into November. Soil moisture replenishment looks to produce highly rated crops in Dec/Jan. The Argentine growing season is off to a favorable start.

US Forecast Stays Wet in W Plains; Warmth resumes After Friday:

The Central US forecast is consistent with prior runs in projecting rainfall of 1-3” across the heavies HRW producing areas of TX, OK, CO, and KS. Dryness persists elsewhere into late month, with hints of just light rain in the southern/eastern Midwest. Rainfall of 3-13” is needed to end drought in NE, E KS, and across the W Corn Belt, but assuming near term forecasts verify, key winter wheat areas will see enough rainfall to promote to solid early crop establishment ahead of winter. Dryness and the return of warmth allows US soybean harvesting to finish Nov 1^st. Producers will again harvest a sizable 15-17% of the US corn crop this week. NASS will publish initial 25/26 winter wheat ratings on Oct 28^th .

CBOT open interest on Tuesday showed corn open interest gained 24,035 contracts, while soybeans were up 19,596 contracts, and Chicago wheat was up 3,655 contracts. These are big daily open interest gains that reflect macroeconomic funds returning to “Trump Trade” amid his deepening talk of use of tariffs. Remember global soybean expected yields are bearish and leading the complex to the downside.

CBOT Corn Stabilize On Large US Export Sales; Harvest Pressure to Challenge Rallies into November:

World corn markets ended firm amid modest short covering and as US exporters sold a sizable 54 Mil Bu to Mexico and unknown destinations for 24/25 delivery Wednesday. Ag Resources (ARC) suspects Mexican demand is fairly routine soda industry business, but there’s little doubt US export disappearance will be sizable into spring. ARC maintains fair value lies between $3.90-$4.30, basis spot CBOT. New sales await recoveries, while end users are encouraged to use any test $3.90-$3.95 to boost supply coverage. Interior basis quotes reflect the sheer size/speed of US harvest this year. On-farm storage capacity will be stressed – forward, bids are evolving normally, but spot bids in C Il have fallen $0.32 under this week. There will be no shortage of supply without adverse weather in Argentina in Jan-Feb or an early end to Brazil’s wet season in April. Corn lacks a story nearby and the soybean corn/ratio looks again to push back 2:1 in the coming months. Corn prices look choppy into year end.

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