We kicked off the day with Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Bowman Speech at 12:00 P.M., Fed Kashkari Speech at 12:50 P.M., Consumer Credit Change at 2:00 P.M., Crop Progress at 3:00 P.M., Fed Bostic Speech at 5:00 A.M., and Fed Musalem Speech at 5:30 P.M., and Used Car Prices MoM & YoY.

The monthly jobs report reverted to its overperformance mode. The October report showed that the US economy added 254,000 jobs in September, up 95,000 from August, 8,000 more than a year ago, and 114,000 more than the consensus estimate. Moreover, the August nonfarm payroll figure was revised upward by 17,000 jobs. The Household survey showed that the unemployment rate was down 0.10% from August, at a 3-month low of 4.10%. The U-6 employment rate, which includes people who want to work but have given up searching and those who are working part-time because they cannot find a full-time job, was down 0.2% from August at 7.70%. The outlook for the US economy stays strong and rates may not fall as far as desired.

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US Climate Guidance Favors Warmth/Dryness into Early November:

The Central US forecast is consistent, with all major forecasting models extending the current pattern into Oct 20^th . A few lite/scattered showers are possible this weekend in WI/MI, but otherwise it remains that disruptions to harvest will be nonexistent. Freezing overnight lows stay absent across the N Plains/Upper Midwest. High temps stay in the 70’s/low 80’s across the southern and central Plains. The GFS ensemble latest 4-Week precipitation anomaly forecast favor Tropical storm activity is projected in eastern Gulf/Florida. Meaningful Central US rainfall is absent. Drought expansion/intensification is probable while a cooling of equatorial Pacific Ocean temps tends to bode poorly for winter precipitation across the S Plains. Corn and soybean harvest accelerate. Winter wheat ratings in late Oct/early Nov will be below average if the dry 30-day forecast verifies.

Friday’s CBOT open interest data showed a decline of 18,299 contracts in corn, but a rise of 13,195 contracts in soybeans and 2,394 contracts in wheat. Traders appear willing to add to net short positions in soybeans. Although the USDA October Crop Report Looms on Friday, the biggest fundamental of the week is Northern Brazil weather with near to above normal rainfall arriving after Tuesday and intensifying throughout the 2-Week forecast. The monsoon is finally developing (10-days late) across N Brazil which looks to promise another sizable or record large Brazilian soybean crop. Once the monsoon arrives, it historically produces rain through March (sometimes too much rain) but the chance of continued drought in this tropical environment is low. Brazilian farmers that are confident in the forecast have started planting their new soybean crop with progress to accelerate into mid-October. Improving Brazilian weather is a “big deal” to world grain markets into mid-2025.

US corn/soybean harvested yield data stays record large with corn being the upside surprise. The US harvest is accelerating with farmers worried about their storage availability for the last 20% of their crop. Sell CBOT rallies.

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