We kicked off the day with Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY, House Price Index, and House Price Index MoM & YoY at 8:00 A.M., CB Consumer Confidence , New Home Sales, New Home Sales MoM, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:00 A.M., Money Supply at 10:00 A.M., 52-Week Bill Auction at 10:30 A.M., 2-Year FRN Auction and 5-Year Note Auction at 12:00 P.M., FOMC Minutes at 3:30 P.M., API Energy Stocks, Building Permits Final, and Building Permits MoM Final at 3:30 P.M.
The Chicago Fed Activity Index showed economic activity contracted in October. This marked the 5th consecutive month of contraction, the 8th negative month in 2024, and the largest decline since January this year. The index is a diffusion index that is comprised of 85 different indicators. 35 indicators showed improvement from September to October, while 48 indicators deteriorated. Two were unchanged. Of the indicators that improved in September, sixteen offered negative contributions. Production-related indicators contributed -o.25 to the index, the sales, orders, and inventories category contributed -0.02 in October, employment-related indicators contributed -0.12, and the personal consumption and housing categories contribution were -0.01. The US economy stays strong in Q2 2025 the US labor market is offering key support.
March CBOT Corn Hangs on to Chart Support; Funds Holding Sizeable Corn Long:Dec CBOT corn ended slightly lower for a third day on modest fund liquidation. Ag Resources (ARC’s) research indicates equilibrium has been found between $4.00-$4.40 March. Nearby March must stay above $.33 to prevent additional selling, but breaks will find support below $4.00. ARC detailed the upward shift in US ethanol disappearance. US sales to Mexico are active but front loaded. There has been a correlation between USDA’s US stocks/use in December against USDA’s Nov WASDE. Recall US corn will be left unchanged in December. However, it’s the post-winter period when greater downside risk returns. Argentine weather will be nearly ideal into the middle part of December, and an early harvest will trim the US’s share of world trade from April onward. The strategy remains one of pricing old and new crop above $4.35 March. A build in global inventories is probable in 2025 as US farmers expand corn seeding by 2-3 Mil acres as record large South American soybean production drops the soybean/corn ratio 2:1 vs. 2.3:1 today. December corn is a sale above $4.50 with harvest lows of 43.59-$3.75.CBOT trade was jolted overnight by news on Truth Social from President elect Trump that many executive orders that he will be signing January 20th (his first day in office) he will place 25% tariffs on Canada & Mexico (all goods), and an additional 10% tariff on all Chinese goods due entering the US. President Trump’s move to each nation’s inability to limit drugs and migrants that are coming to the US. The Trump tariff talk pressured CBOT corn/soybean US ag products. However, its not all bearish. China exports more than 2MMT’s of used cooking oil (UCO) into the US that will be subject to the additional 10% tariff in production of renewable diesel. Soyoil futures rallied sharply on the possibility UCO imports from China would be diminished profitability for exporters. The rise in soybean oil helped soybeans crawl back from early night losses. However, China will avoid purchasing additional US soybeans beyond January 20th amid the tariff threat. China has be obviously absent from the US ag market this year.More By This Author:
Tariffs Are Not All Bearish. The Corn & Ethanol Report
