We kickoff the day with MBA 30-Year Mortgage Rate, Mba Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Goods Trade Balance Adv., Retail Inventories Ex Autos MoM Adv., Wholesale Inventories MoM Adv., Retail Inventories Ex Autos, and Wholesale Inventories MoM at 7:30 A.M., Pending Home Sales MoM & YoY at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction and 2-Year Note Auction at 10:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press Conference at 1:30 P.M., and Dairy Products Sales at 2:00 P.M.

Fed expected to lower rates by a quarter-point, driven by a slowing labor market and prevent a sharp slowdown in job growth. While most economists agree on a cut, some officials remain divided, and the outlook is clouded by a government shutdown that is obscuring economic data. Secondly, Vice President JD Vance joined Senate Republicans’ lunch to discuss votes against President Donald Trump’s tariffs, but according to Sen. Ted Cruz (R-TX) the primary topic was Trump’s plan to increase importation of Argentine beef in order to lower prices for consumers. The National Cattlemans Beef Association opposes Trump’s plan, saying it “undercuts the future of family farmers and ranchers by importing Argentine beef.” It was a vigorous discussion, and JD was listening and hearing the strenuous views from multiple senators,” Cruz said. This was reported by Elizabeth Troutman Mitchell, White House Correspondent for “The Daily Signal>” Hurricane Melissa after making landfall in Cuba and weakened to a Category 3, Make no mistake this is still a dangerous & powerful storm, and the Bahamas, Tuoks, Caicos Islands are in the path today. Bermuda is forecast to have Hurricane Conditions tomorrow.

The Federal Housing Finance Authority reported that the average price of single-family homes, with mortgages guaranteed by Fannie Mae & Freddie Ma, jumped by 0.4% in August after being unchanged or lower in the previous 4 months. The House Index rose to a record high of 435.3 (435% in Jan 1991), and was 2.3% higher than a year ago. However, this was the smallest annualized increased in 13 years. In the 9 census divisions, August home prices ranged from a 0.8% monthly decline in Pacific regions, to a 1.2% increase in the Middle Atlantic. Compared to a year ago, the Pacific region was down 0.6%, and the Middle Atlantic was 6.3% higher. The upside momentum in US home price gains is slowing. The supply of US homes is growing as interest rates decline.

Photo by Waldemar on Unsplash

Global Cash Market Update

US, South American Corn FOB Premiums Stuck; Ukrainian Offers Erode as Harvest Advances:

It remains difficult to be fundamentally bullish of corn at $4.30, basis spot CBOT, as cash markets show no real signs of supply tightness and as it’s difficult to project US end stocks below 2.0 Bil Bu, even assuming a final national yield of 179-181 BPA. US, Argentine and Brazilian premiums have traded in a narrow range of $.85-$1.15 since late August. However, new this week is the erosion in Ukraine’s cash market, with fob offers there quoted at $1.10 over spot CBOT for immediate arrival and $1.07 over December. Notice also fob premiums are near unchanged from levels of Oct/Nov 2024. It’s been a dull market. Ukraine has been subject to abnormally heavy rainfall in October, with key parts of northern Ukraine so far recording 3.5-3.7” – or double longer term averages. Soaking rain will be absent from the Ukraine into Nov 12^th, which speeds drying and quickens the flow of corn to ports. Ukrainian corn on a fob basis is now offered below Brazilian origin.

Corn Comments & Analysis

CBOT Corn Rally Pauses at 200-Day Moving Averages:

Corn futures ended firm, but Dec and March CBOT were unable to break next key resistance at $4.37 & $4.52, respectively. An open chart gap left on corn’s continuous chart at $4.33 was filled, and it may be  “gut check” time for bulls. Sorghum basis across the W Plains remains stuck at$1.00-$1.25/Bu under with no increase in Chinese interest. The 2-day CBOT rally sparked a massive amount of corn to move. The market today is aligned with USDA’s projected stocks/use of 13%. ARC’s balance sheet (15% stocks/use) suggest a downside risk to $390.-$4.oo holds. A US corn stocks/use below 11% is needed to sustain $4.30 + Dec. The details of US-Chinese talks – and whether the US drops its 20% fentanyl-based tariff on China completely (not just half to 10%) are paramount. ARC was surprised to learn that the US/China are still negotiating on the purchase of US soybeans. Sec Treasury Bessent on the weekend made it sound like a deal was already for presidential signing. March corn at $4.45-$4.50 reached ARC’s upside price target and sales were advised. There is no indication that China has any interest in US corn.

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