We kicked off the day with PPI, PPI MoM & YoY, and PPI Ex Food , Energy and Trade MoM & YoY at 7:30 A.M., Fed Goolsbee Speech at 8:45 A.M., Michigan Consumer Sentiment Prel, Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Current Conditions Prel, and Michigan Inflation Expectations Prel at 9:00 A.M., Crop Production, USDA Supply/Demand, and WASDE at 11:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Fed Bowman Speech ar 12:10 P.M.

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The US Bureau of Labor Statistics reported that the annualized inflation rate in September slipped to a 43-month low of 2.4%. However, the Consumer Price Index rose for the 9^th consecutive month and set a record high of 315.3. The Foods, Meats, Housing, Medical Care, Education, Other Goods, and Core Inflation Indexes all set new record highs, while the Energy Index fell to a 31-month low. While the rate of increase of prices is slowing, it does little to improve the financial well being of many Americans. Since Jan 2021, the CPI has increased bt 20.5% while wages, as measured by the Employment Cost Index, have increased by just 17%. Wages have not kept pace with cost-of-living increases, and many Americans feel (and are) much poorer than before the pandemic due to the inflation tax.

Models in Better Agreement on 10-Day South American Rainfall; Widespread Moisture Boost Forthcoming:

The GFS models have trended a bit wetter in Mato Grosso, which puts that solution in better alignment with the EU and Canadian model outlooks. Routine South American weather begins next week, and a pattern of regular rain is probable across tropical latitudes of Brazil into early 2025. Mato Grosso seeding progress today will determine the details of soybean harvest/safrinha planting dates, but big-picture threats are in rapid retreat. Importantly, heavy rainfall in Rio Grande do Sulin far southern Brazil across key areas of Central Argentina push back any concern of La Nina’s normally negative impact on weather there. It remains that La Nina intensifies over the next 30 days, but drought concerns are being eased. Argentine this week is 19% complete, vs. 14% a year ago in mid-October.

CBOT Corn Sheds Premium Ahead of WASDE; Ukrainian Cash Market Hits Newer Highs; Argentine Corn Planting Accelerates:

Dec CBOT corn fell to test its 20-day moving average, with enthusiasm on both sides lacking. Ag Resources (ARC’s) work suggest fair value lies between $4.00-$4.40, basis Dec, prior to expiration, assuming a final yield of 183.0-184.5. Most important in the short term is that the speed/size of harvest keeps rallies challenged into the latter part of October. Continue to trade this range. A bullish USDA report will very likely trigger additional pricing worldwide. South America’s weather pattern is improving, but it’s to be bearish below $4.05-$4.10 Dec, amid expanding US export potential. Ukrainian and Argentine fob premiums continue to rally on a near-daily basis. US corn is competitive. US export sales in the week ending Oct 3^rd totaled 48 Mil Bu. Sales must average 33 Mil/week to meet USDA’s target. Both the Bulls and bears will struggle for meaningful leverage into winter. Rallies will be used for sales.

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