Rumpus Daily, 10 Oct 2026: Third-place finisher backs Flávio Bolsonaro as Lula's odds sink to 12%

In this episode: Third-place finisher backs Flávio Bolsonaro as Lula's odds sink to 12%; Traders double the odds of South Dakota corn topping 155 bushels; Traders price a Houthi loss of Perim Island by December. Three stories this morning. Brazil's runoff now leans hard towards Flavio Bolsonaro: the third-place finisher has backed him, and traders on Polymarket price the sitting president Lula at twelve per cent.

Transcript

Opening

Sheema: Good morning and welcome to The Rumpus Daily. I'm Sheema Sharti.

Neil: And I'm Neil Matthews. Every weekday we bring you the signals from the world's prediction markets. Today is Saturday, October tenth.

Sheema: Three stories this morning. Brazil's runoff now leans hard towards Flavio Bolsonaro: the third-place finisher has backed him, and traders on Polymarket price the sitting president Lula at twelve per cent. Then, traders on Kalshi doubled overnight the odds that South Dakota's corn crop tops a hundred and fifty-five bushels an acre. And traders now price a seventy-seven per cent chance the Houthis lose Perim Island in the Bab el-Mandeb Strait by year-end. That contract jumped forty-five points in a single day.

Neil: On Brazil, is that twelve per cent a genuine read, or is there more life in Lula than the price suggests? Lula's contract traded over nine hundred thousand dollars in twenty-four hours and barely moved two points.

Sheema: Heavy volume, small move. We will get into it.

Third-place finisher backs Flávio Bolsonaro as Lula's odds sink to 12%

Sheema: Third-place finisher backs Flavio Bolsonaro as Lula's odds sink to twelve per cent. Augusto Cury, who came third in Brazil's first round, endorsed Bolsonaro's son for the October twenty-fifth runoff. Bolsonaro took forty-seven per cent of the first-round vote, short of the majority he needed to win outright.

Neil: Polymarket puts Lula at twelve per cent, down thirty-two points in a week. Kalshi prices the same question at twelve for Lula, eighty-eight for Bolsonaro.

Sheema: Runoffs reshuffle coalitions, though. Thousands of students marched in Rio on the eighth against a Bolsonaro presidency. If enough first-round Cury voters go to Lula rather than follow their candidate's endorsement, the gap closes.

Neil: Does it close fast enough? Bolsonaro starts the runoff on forty-seven per cent, with Cury's bloc now formally behind him. September inflation hit the central bank's ceiling of four-and-a-half per cent on an energy shock. Voters punish whoever holds power when prices are high, and Lula holds power.

Sheema: Our call: Bolsonaro wins on October twenty-fifth. At twelve per cent, Lula's price overstates a comeback. Consensus reporting of the count naming Lula the winner would prove that wrong.

Traders double the odds of South Dakota corn topping 155 bushels

Neil: South Dakota corn. Traders on Kalshi doubled the odds this week that the state's twenty-twenty-six corn yield tops a hundred and fifty-five bushels per harvested acre. Fourteen per cent on October third, thirty per cent now, and the whole move came in the last twenty-four hours.

Sheema: Does one day of trading support a forecast on a number the Agriculture Department does not publish until January thirty-first?

Neil: The rest of the ladder says it does not. The contract for a yield above a hundred and fifty bushels sits at sixty-six per cent. Above a hundred and sixty, fourteen per cent. So traders still think a yield above a hundred and fifty-five is the less likely outcome. Thirty per cent is the tail of a distribution centred lower.

Sheema: And the thin trading at the top rungs, above a hundred and sixty, tells you the book has no firm view there at all.

Neil: Which is why a one-day jump does not settle it. If a monthly crop report from the Agriculture Department's statistics service puts South Dakota above a hundred and fifty-five, that changes the picture. Until then, the thirty per cent overstates the upside.

Traders price a Houthi loss of Perim Island by December

Sheema: Perim Island by December. The Polymarket contract paying yes if Houthi forces lose control of Perim Island in the Bab el-Mandeb Strait by December thirty-first trades at seventy-seven per cent, up forty-five points in twenty-four hours.

Neil: Two things happened at once and they should not be conflated. The October thirty-first contract had been trading below the October fifteenth one, which is impossible: an island lost by the fifteenth is also lost by the thirty-first. That contract jumped forty-four points to correct its own error. The December contract's move is separate and needs its own explanation.

Sheema: So what explains December at seventy-seven per cent?

Neil: DW reported on the eighth that Yemeni government forces are pushing towards the Bab el-Mandeb Strait. Traders appear to read that campaign as well on its way to taking the island. But a push on a waterway is not the fall of an island in it, and seventy-seven per cent treats the first as most of the way to the second.

Sheema: Each of these contracts trades only fifteen to twenty-five thousand dollars a day. A thin book can move on thin reasons. Our call: Houthi forces still hold Perim on December thirty-first. The first test is whether any major outlet reports government forces in control of the island before month-end.

Close

Sheema: Neil, thanks very much.

Neil: Thanks, Sheema.

Sheema: That's The Rumpus Daily for Saturday, October tenth. We'll see you tomorrow.