Written Commentary
MORNING COMMENTS
Macroeconomics:
Oil continues its surge higher today as China returns from their Golden Week holiday. The world awaits Israel’s counter strike on Iran after last week’s events. The US is prepping for another natural disaster this week. Hurricane Helene has shed light on FEMA’s empty wallet which will be even more of a problem after Milton hits Florida on Wednesday. Jobs report was hot late last week and the market will start to discuss expectations of the Fed’s next rate cute expected on November 7th.
Ag Fundamentals:
Funds covering shorts in both corn and beans over the past few weeks has been a leg for bulls to stand on aside from news of higher corn usage, lower corn production estimates and the back and forth regarding Brazilian weather. Now that the funds are closer to even with a major WASDE report releasing this Friday and the US presidential electing less than 1 month away, I doubt fund managers decide to take on a leveraged positions in the next 30 days. So that short covering leg will not be there in an environment that needs constant bullish news to continue an upward trend. We could see flat to lower row crop prices as US harvest continues at a rapid pace.
Weather:
There are a few spots between Wisconsin and parts of eastern South Dakota that saw below freezing temps this morning. The Minimum temps the rest f the week are expected to remain above 40 degrees. Expect another week of clear weather for US farmers to continue harvest without rain delays. Florida is evacuating and preparing for another major hurricane to arrive on Wednesday this week. Brazil has rain in the 10 day forecast and many believe it will be enough to allow planting to progress at a substantial pace between now and the end of October.
Most of Wisconsin and parts of eastern South Dakota and northeast west Iowa were exposed to some low temps this morning possibly seeing frost.
Hurricane Milton is forming in the Gulf of Mexico and is expected to hit the west coast of Florida on Wednesday afternoon/evening. Milton is expected to reach a category 3 hurricane creating a surge of over 12 feet in some areas along Florida’s gulf coast.
Rain in Brazil’s 10-day forecast should be enough to kick start their planting season. up to 3 inches of rain are expected by the end of this coming weekend in central growing regions.
Export & World News
The US sold 116K MT of soybeans to China and 198K MT of corn to unknown buyers. Saudi Arabia purchased 307K MT of wheat for delivery between December and January.
Malaysian palm oil futures were up 39 ringgit overnight, at 4339.
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