Agriculture markets are benefitting from two important positive catalysts:

• Price-supportive WASDE stats on Friday, including a tighter soybean carryout on lower acreage and higher exports. 

• Macro environment upgrade driven by Trump's Covid recovery, Chinese markets rallying after Golden Week, and investor optimism for a U.S. stimulus package. The S&P 500 is up +3.4% in October, Chinese A-shares +1.7%, crude oil +1.3%, U.S. dollar -1.0% = all positive tailwinds for agriculture futures.

​The macro calendar this week focuses on inflation, manufacturing, and retail sales data:

• Monday: U.S. Columbus Day holiday (commodity futures and stock markets open)

• Tuesday: CPI inflation data

• Wednesday: PPI inflation data

• Thursday: Jobless claims, Philly Fed, Empire Manufacturing

• Friday: U.S. retail sales

Fund positioning remains the most significant red flag for agriculture traders, especially for oilseed markets. This weekend's COT report showed managed money traders record long across the soy complex (chart of the week below) and non-commercial traders are the longest they've been in aggregate since June 2016.

Seasonals:

Price seasonals are bullish over the coming weeks - especially for oilseeds, cattle, arabica coffee, and cocoa. Seasonals for the grain markets, cotton, and the Dalian markets turn more negative into the end of October. 

What matters this week:

Friday's WASDE statistics and the improved macro environment go a long way in keeping massive hedge fund long positions confident. 

Looking forward, we enter a data vacuum ahead of the U.S. election: The big Sep 30th stocks report and Oct 9th WASDE are now behind us and there are no more NFP job reports or Fed decisions until after November 3rd. This week we see some second-tier U.S. data, but investor focus is shifting to U.S. elections and the increasing pace of U.S. Covid-19 infections in the U.S. and Europe.

Watch this week:

Fundamentals: Watch how U.S. farmer selling and the pace of China exports react to higher futures prices and watch South American weather maps.  

Non-fundamentals: Watch how markets react to this week's U.S. data, esp price action in crude oil (currently rangebound) and the U.S. dollar (downtrending = good for ags) and watch how traders adjust to record long positioning across the soy complex.

Chart of the Week: Managed money hedge fund traders are record net long across the soy complex today.

For a trial of our industry-leading agriculture research, reach out to us: insight@peaktradingresearch.com.