We kicked off the day with Challenger Job Cuts at 6:30 A.M., Export Sales at 7:30 A.M., Fed Harker Speech at 8:00 A.M., NY Fed Treasury Purchases 1 to 2.5 yrs. at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Fed Schmid Speech at 12:30 P.M., and Fed Bowman Speech at 12:35 P.M.

The Bureau of Economic Analysis’s monthly new car and light truck sales data showed a surge in car sales in December. Total car and light truck sales in December amounted to 16.8 Mil vehicles, setting a new high for 2024 and marking the largest monthly sales volume since May 2021 (43) months. This pushed total sales volume for the year to 189.5 Mil vehicles, a 2% increase over 2023 and the largest annual sales volume since 2019. However, the volume still fell short of the pre-pandemic era. 81% of vehicle sales in 2024 were considered light trucks or SUV’s, and just 19% of sales were cars. This compares to 2012, when it was still a 50/50 market share. In 2012, Obama-era regulation began to take hold, which implemented strict MPG requirements for cars that were to reach 55MPG by 2025, which caused automobile manufacturers to focus their manufacturing and marketing trucks/SUV’s.

Photo by Jesse Gardner on Unsplash

South American Weather Update

Models Introduce Rain into Western Argentine Crop Areas; Wetter Pattern in late Jan/Feb Probable:

Long range South American outlooks are improving as confidence is high needed rain expands into Southern Brazil in 11-15 day period, and as forecasts begin to allow better rain chances back into Argentina after Jan 20^th . It remains imperative that the late January outlook stays wetter across Argentina. Model forecasts will be followed every 6 hours. But assuming a pattern change occurs Argentine yield loss will be limited in nature. Risk stays present in E Argentina, but stress is projected to ease in critical areas of Cordoba and N Buenos Aires. Significant boosts in soil moisture are occurring across central and northern Brazil. South America looks to harvest a record soybean crop amids favorable weather.

Global Weather Pattern Discussion

Drought Ends in E Europe, Ukraine, Moisture Building Across Russia:

Active rain/snow across the Black Sea region since late autumn has ended long term drought completely in Romania, Bulgaria, and Ukraine, while meaningful deficits in Russia are confined to pockets of the south. Near to above normal precipitation is forecast across the Black Sea region into Jan 22^nd, and most probably winter wheat exits dormancy with limited moisture concern. More rain is needed in parts of southern Russia, but soil moisture is currently adequate and abundant in E Europe and all but far southeastern Ukraine. Ag Resources notes abnormal warmth is set to persist across E Ukraine/Russia into late month. Winterkill risks are low amid seasonal warmth. The 2025 Russian wheat crop is expanding in size.

CBOT Corn Corrects; Market Unable to Score New Rally High Amid Improving Argentine Weather Forecast:

Global corn futures ended lower as Argentina is likely to avoid worst-case scenarios – and fob premiums fall another $.04/Bu. A bullish surprise is needed in Fridays USDA reports to propel the market above $4.60 basis March. This price has acted to cap rallies since late December. The already – sizable fund long demands new fundamental fuel to expand the bulls push above $4.60-$4.65 March resistance. 2025 South American corn production is forecast to rise 250-275 Mil Bu assuming extended range Argentine weather forecasts verify. ARC also views USDA’s Brazilian corn area forecast as 100-200,000 hectares too low, with profitability to maximize Brazil’s safrinha seeding in March. Amid the absence of China as an sizable world corn importer, South America must undercut US values to garner export demand in coming months. $4.50+ basis December is a sale. Confirmation of reduced winter wheat seedings on Friday opens the potential for a 3-4 Mil Acre jump in US corn planted area 2025. ARC will advance corn sales basis December corn futures at $4.47-$4.52.

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