We kicked off the week with CB Leading Index MoM and Export Inspections at 10:00 A.m., and 3-Month & 6-Month Bill Auction at 10:30 A.M.

Existing home sales in December were reported at 3.78 Mil homes. This was a 1% decline from November and 6% less than a year ago. It was also the smallest monthly sales figure since August 2010 and the smallest since December sales volume since 1991. Total existing home sales in 2023 amounted to 49.2 Mil homes, marking a 19% decline from 2022, and the largest decline since 2007. This follows a 17% decline in 2022. Total existing home sales in 2023 fell below the housing/financial crisis of 2008/09 and the recession that followed and were the lowest since 1995. Mortgage rates have declined in the last 2 months, and there is hope that a further decline will revive the real estate market in 2024.

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South American weather pattern forecast is still consistent with Argentine warmth/dryness extended into early February. The GFS, EU, and Canadian models are in good agreement. Confidence in high on the pattern ahead, but uncertainty beyond the next 12-14 days. Brazilian weather leans broadly favorable as additional moisture boosts benefit later planted soybeans – as well as replenish subsoil moisture reserves ahead of safrinha seeding, which will accelerate in some northern areas in mid/late February. Regular showers return to Brazil by mid-next week. The GFS ensemble model’s 16-day forecast. Notice that cumulative rainfall of 3-7” will blanket the northern 2/3rds of Brazil’s Ag Belt. Yet, also very little rain is offered to Argentina, and rain currently forecast is confined to the 12-16 day period. There’s hope for a pattern change by mid-Feb, but the return of rain is needed as rapid draws of soil moisture occur nearby.

Corn open interest soared in Friday’s action with corn gaining 23,517 contracts, 8,717 contracts of soybeans, while soybean oil was up a massive 16,094 contracts. Chicago wheat was down 724 contracts and soybean meal lost 3,723 contracts. Also on Friday, Phillips 66 took a significant step forward in opening its mega biofuel plant in Rodeo, California by successfully navigating a comprehensive environmental review that was approved its local regulator – Contra Costa as it met all elements of the California Environmental Quality Act. This opens the way for the US’s largest renewable energy/plant to start operations in the coming weeks. The Phillips 66 Rodeo plant has the capacity to produce 50,000 barrels of renewable diesel daily, dramatically expanding US biofuel feedstock demand. Ag Resources (ARC) notes that Phillips 66 has partitioned California’s Air Quality Board to be able to import/use Argentine soybean oil as a feedstock amid US vegetable oil supply worry. A decision is awaited but Argentine soybean oil would still be subject to a 19% US import duty and rising transaction costs.

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