We kicked off the day with MBA 30-Year Mortgage Rate, MBA mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Real Earnings – Core Inflation Rate MoM & YoY, Inflation Rate MoM & YoY, CPI, CPI s.a., and NY Empire State Manufacturing Index at 7:30 A.M., Fed Barkin Speech at 8:20 A.M., Fed Kashkari Speech at 9:00 A.M., EIA Energy Stocks at 9:30 A.m., Fed Williams Speech at 10:00 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Goolsbee Speech and NOPA Crush at 11:00 A.M., Fed Beige Book at 1:00 P.M., and Dairy Products Sales at 2:00 P.M.
Optimism among small business owners, as measured by the National Federation of Independent Business’s monthly survey of small business owners, exploded in November Following the election of President Trump and continued to expand in December. The NFIB’s Small Business Optimism Index in December rose 3.4 points from November to a 74 month high of 105. This was the highest reading since October 2018 (President Trump’s first term) and the 2nd consecutive month that the index was above the long-term average. NFIB’s chief economist noted, “small business owners feel more certain and hopeful about the economic aganda of the new administration, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year.” The net percent of business owners who expected the economy to improve 16 points to 52%, the highest since Q4 1983, (President Reagan’s first term) and net percent of owners who believe it was a good time to expand their business’s rose 6 points to 20%.
South American Weather Pattern DiscussionBrazilian Pattern Ideal; Models Remain at Odds Over Argentine Pattern Change; Major Crop Stress in Near term:The South American forecast is broadly consistent with a nice mix of rain/sun forecast across the entirety of Brazil over the next two weeks, and with confidence rising with respect to the return of rainfall across southern and western crop areas of Argentina in the 9-15 day period. Yet, the details of Argentine weather will be monitored closely. Note extended range climate guidance offers the risk of dryness in Argentina in February., which raises the importance of rainfall amount/coverage there into Jan 27th . Moisture remains abundant in Cordoba and western Santa Fe, but it’s the rest of Argentina’s Ag Belt that faces mounting stress over the next 8-9 days. The need for rain in E Argentina becomes immediate Jan 24th .Corn Rallies Pauses; Market Overbought Technically; All About Argentine Weather Next Two Weeks:World corn markets on Tuesday ended steady to weaker amid a lack of meaningful new bullish input. The CBOT corn early rally was riding the coattails of the USDA’s announcement of another sale of soybeans to China pegged at 198,000 MT’s (72 Mil/Bu) and Argentine weather was not enough to sustain the bulls. There’s broad agreement that regional showers impact Argentina in the 8-15 day period. Acute focus will be paid to weather details there. Otherwise, ARC notes March CBOT corn is overbought, and this must be reconciled via correction or a prolonged period of neutral/choppy price action. Catch up on 2024 & 2025 hedges at current prices. Following USDA’s WASDE, ARC sees fair value at $4.40-$4.80 basis spot. There is a need for trend/above trend safrinha yields in N Brazil, and soy harvest progress data beginning in late Jan will provide guidance on the timing of safrinha seeding – and whether a majority of that crop can be planted prior to March 10th . The market stays rather sensitive to global weather patterns over the next 6-7 months, but the arrival of US tariffs and the absence of a global demand driver imply supply-based rallies must be rewarded.More By This Author:Friday’s Jobs Number No Help to Purchasing Power. The Corn & Ethanol ReportImproving Argentine Weather Forecast & WASDE Tomorrow – The Corn & Ethanol ReportCash Prices And Exports Remain Intact – The Corn & Ethanol Report
