We kicked off the day with Export Sales, Fed Barkin Speech, Initial Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, and Wholesale Trade at 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Crop Production USDA Supply/Demand, WASDE, and 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Fed Barkin Speech at 11:05 A.M., and 30-Year Bond Auction at 12:00 P.M.

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The International Trade Report showed that the US trade balance worsened in December toa $62.2 Bil deficit. Compared to a year ago the December deficit was 13% larger, marking the 14 consecutive month that the trade deficit was larger than the previous year. The annual trade deficit for 2023 totaled $773 Bil, the 3^rd largest on record behind 2022 and 2021. Annual imports in 2023 fell by $142.7 Bil to $3.8 Tril, due to the lower cost of oil and the slowdown in US demand for goods., and motor vehicles.

South American weather forecasts add rain to Argentina; with a drier forecast in Brazil in a 6-15 day period: the EU and GFS models are wetter in southern and Central Argentina into the weekend, with totals of 3-4” probable in key areas of La Pampa, Buenos Aires, and Cordoba. Damage done to yield potential with recent heat and dryness will be unknown for a few weeks, but stabilization occurs rather quickly amid ample rain and a moderation in temperatures. Active showers also persist nearby in key areas of Northern Brazil. It remains that new threats are lacking. Close attention will be paid to Brazil, with the return of widespread and heavy rain needed in late February and throughout March to maximize safrinha corn yield potential, but even an early exit of the Brazilian wet season won’t materialize until late February and early March South American crops outside of Parana, Sao Paulo and RGDS in S Brazil will be well watered on Feb 15. Were coming in mixed this morning with soybean oil and soybeans leading the way for the bulls. The question remains as we have a spring tease followed by snowy and below average temperatures. The keys to today’s report are CONAB estimate cuts in corn and soybeans yields. Any surprises could have traders doing a bull rush lightening up the load of record short fund positions. Traders are also betting there is not much more downside risk. Algorithms and funds with volatility will add to the excitement.

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