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., ADP Employment Change at 7:15 A.M., Employment Cost – Benefits QoQ, Employment Cost – Wages QoQ, Employment Cost Index, and Treasury Refunding Announcement at 7:30 A.M., Chicago PMI at 8:45 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press conference at 1:30 A.M., Cattle & Dairy Products Sales at 2:00 P.M.

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The widely followed Case-Schiller home price index showed that home prices in November eased from the previous month for the first time since January, declining o.2% from October but were still 5.4% higher than a year ago. However, the much broader Home Price Index from the Federal Housing Finance Agency showed that on a national basis, US home prices rose 0.3% from October and were 6.6% higher than a year ago. Marking the 141^st consecutive month of year-over-year gains and put the index at a new contract high of 417% since January 1991. This occurred as mortgage demand in November slipped back to multi-decade lows. Tight inventories due to limited selling interest continues to drive US housing prices higher.

Ag Resource Brazil was the big headline in yesterday’s action with their Brazilian soybean crop estimate at 145.4 MMTs. The ARC Brazilian soybean harvest is 6% less than in 2023 and 8% than the USDA’s estimate of 157 MMTs, and CONAB projection of 157 MMTs. With this in mind it’s showtime for weather in South America in the coming weeks. The CBOT markets are coming in weaker with two other usual suspects grabbing headlines with disappointing Chinese manufacturing activity, slumping for 4^th consecutive month ahead of today’s Fed decision on interest rates and meeting conclusion. Most likely dovish not hawkish.

Farmers and traders will be closely monitoring South American weather that has a slightly wetter forecast beyond February 9^th with scattered showers for Argentina, but a dry weather pattern holds across the southern quarter of Brazil. The forecast models are working out the details of rain beyond February 9^th with patchy Argentina rains of 2.5-1.25” the best bet. A high pressure Ridge progresses eastward allowing temperature moderation and scattered showers in the 11-15 day forecast period across west and south Argentina. A lengthy 8-9 stretch of hot/dry weather is ahead of Argentina and southern Brazil with extreme heat adding to crop stress with high temperatures ranging from mid-90s to lower 100s. Shower chances return on February 9^th and linger into February 13^th. Another spate of dry weather follows. This could add to the drama of the February 8^th Crop Production USDA Supply/Demand and WASDE data.

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