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We kickedoff the day with Export Sales, GDP Growth Rate QoQ Final, GDP Price Index QoQ Final, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Continuing Jobless Claims, Core PCE Prices QoQ Final. Corporate Profits QoQ Final, GDP Sales QoQ Final, Jobless Claims 4-Week Average, PCE Prices QoQ Final, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, Philly Fed Prices Paid, and Real Consumer Spending QoQ Final at 7:30 A.M., CB Leading Index MoM at 9:00 A.m., EIA Natural Gas Stocks at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.m., 15-Year & 30-Year Mortgage Rate 11:00 A.M., and 5-Year TIPS Auction at 1200 P.M.

Existing home sales in November rose 0.8% from October, marking the first monthly uptick in 6-manths. However, it’s worth noting that the October sales figure was the lowest since August 2010. Compared to a year ago, November home sales were down 7.3% at 3.82 million homes, marking the 28^th consecutive month of year-over-year declines. Historically, declining home sales have been an indication of US financial recession. However, the current bout of declining sales has been due to a decade of low-interest mortgages, followed by a historic rate hike in the last 2 years. Homeowners have been reluctant to trade their low-interest mortgages for current rates. A decline in rates in 2024 could loosen inventories and allowing the housing market to start functioning. Ag Resources (ARC) also reports rain imminent in northern Brazil and totals and average are critical in the next 5-days. The GFS model has trended slightly wetter in western and northern Mato Grosso, but otherwise the South American forecast into December 30^th is consistent with prior runs. Needed rain begins to fall across the driest areas of northern Brazil in the next 24 hours. Totals into Fri/Sat of 1” will blanket N Brazil, but uncertainty remains elevated with respect to coverage of 2” or more. The EU solution remains wet. The GFS keeps soaking totals more scattered in nature. Any or all rain in N Brazil is welcomed. Worst-case Brazilian soy yield scenarios will be avoided. But questions over final Brazilian soy acres/yield will remain unanswered until harvest. Rainfall of 10-12” will be needed in N Brazil in January, and soy seeding dates in Brazil will be spread over a 90-day time frame. The state of Mato Grosso in fact will allow soybeans to be planted until January 31^st . Brazilian supply risk remain high with very abnormal drought in Nov/Dec. Also Dec 1 US corn stocks will be large, ARC estimates stocks will be at a 6-year high at 12.046 Mil/Bu, up 1,225 Mil (11%) year-over-year. Production is assumed slightly below USDA’s forecast, but seasonally weak export disappearance in Sep-Nov and plateauing of ethanol grind are noted. Dec 1 corn stocks as a percent of consumption is calculated at 268%, the highest since 2017. Clearly there’s no shortage of supply, and the markets goal remains to encourage enlarge export demand while maximizing industrial utilization. ARC does note this occurring as ethanol grind, while plateauing, has been 4% above a year-ago levels since early December. US exporters face modest competition from Ukraine, but otherwise Brazil and Argentina won’t be bulk exporters until mid-summer. Corn price discovery nearby will stay a battle of large existing stocks against expanding demand and forward supply risk in Brazil. Additionally Ag Resources (ARC) projected Sep-Dec disappearance of 4,494 Mil/Bu is up 5% year-over-year, which matches the USDA’s annual forecast exactly. Ethanol margins are profitable. US corn is cheap in the world marketplace. It’s just difficult to be bearish corn at $470 despite large inventories and profitable margins. There were no trades or open interest in ethanol futures. The spot corn needs to punch through 490 technically to get this party started. In the overnight electronic session the march corn is currently trading at 470 ¾ which is 1 cent higher. The trading range has been 470 ¾ to 469 ¼.

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