Grain markets delivered a mixed performance in early October, with soybeans leading modest gains while corn and wheat saw uneven movement. Traders are closely watching delayed USDA data, dry U.S. weather patterns, and ongoing political gridlock in Washington as potential headwinds for the weeks ahead.

Historically, October has proven to be volatile for commodities. Over the past decade, corn and wheat prices have shown mixed tendencies, while soybean futures often dip to seasonal lows. Notable years like 2012, 2020 and 2022 saw bullish Octobers due to drought or demand surges, while 2015 brought sharp declines amid oversupply concerns. This year's setup could again challenge farm margins if seasonal pressures intensify.

Dryness continues to dominate forecasts across the central U.S., with only limited rainfall expected in the Northern Plains and Midwest through the weekend. NOAA's extended outlook suggests that between October 8 and 14, much of the country could face warmer and drier-than-average conditions-a trend that could stress late-harvested corn and soybeans while influencing winter wheat planting.

Corn prices ticked slightly higher, supported by gains in soybeans and light technical buying. December futures closed at $4.1650, up a penny, while March contracts gained 0.75 cents to $4.3275. Ethanol production slipped to 995,000 barrels per day, and stocks fell 3%, according to the U.S. Energy Information Administration.

Uncertainty surrounds Thursday's USDA export report. The agency has paused some data during the shutdown, although internal planning documents suggest it intends to continue releasing export sales. For now, analysts expect corn exports to fall between 47.2 and 78.7 million bushels for the week ending September 25.

Soybeans were the standout, posting more than 1% midweek gains. November futures rose 11.25 cents to $10.13, while January contracts reached $10.31. Gains came despite a lack of Chinese purchases, with traders encouraged by President Trump's comments that soybeans would be a major talking point in upcoming U.S.-China meetings. Export sales are expected between 11.0 million and 58.8 million bushels, with soymeal and soyoil sales also on the radar.

Analysts are also watching for the next soy crush report, likely delayed by the shutdown, which was expected to show an August crush of 196.4 million bushels. For the marketing year, total crush is projected to hit a record 2.49 billion bushels, representing 57% of total U.S. soybean production.

In Brazil, soybean planting has begun quickly, although dry conditions in Mato Grosso have forced temporary delays. Growers expect planting to resume once rains return.

Wheat futures posted mixed results, with Chicago SRW December futures up 1.25 cents to $5.0925, and Kansas City HRW contracts down 2.25 cents to $4.9550. Ahead of USDA's next report, analysts project wheat sales between 11.0 and 23.9 million bushels. Meanwhile, EU wheat exports lag year-ago levels, totaling 160.5 million bushels versus 233.7 million at this point last season.

Globally, Taiwan has issued a tender to purchase 3 million bushels of U.S. milling wheat, with delivery set for later this month.

On the political front, uncertainty from the U.S. government shutdown is starting to impact ag data flow and market sentiment. Deputy Agriculture Secretary Stephen Vaden criticized the funding impasse, calling the situation "very stupid," while lawmakers debated the path forward. Markets, however, remained resilient, with the Dow gaining 68 points amid expectations of a short-lived shutdown.

Some Republican lawmakers acknowledged that China may continue to withhold new ag purchases, reinforcing a longer-term decoupling in global trade flows.

As October progresses, U.S. grain producers face a volatile mix of seasonal risk, policy noise, and export uncertainty. For now, markets remain rangebound, but new USDA data-or its absence-could quickly shift the tone in the days ahead.