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Transcript

Daily Market Podcast Jul 30 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:01
  SPEAKER_00: This is Chris Myers with our daily market letter on Thursday, July 30th.
• 0:05
  SPEAKER_00: Walking in this morning, December corn is up one and three quarters at 473 and a half.
• 0:10
  SPEAKER_00: November beans are unchanged at 11.92 and three quarters.
• 0:13
  SPEAKER_00: December meal is down 80 cents at 322.7.
• 0:18
  SPEAKER_00: And September crude is off 50 cents at 84 even.
• 0:22
  SPEAKER_00: On Corn News this morning, during the month of July, we saw speculators go from having a decent short position at the beginning of the month in CBST corn to having a decent long position now.
• 0:35
  SPEAKER_00: And all that futures buying had to do with U.S.
• 0:38
  SPEAKER_00: crop, U.S.
• 0:39
  SPEAKER_00: corn crop being threatened.
• 0:40
  SPEAKER_00: Weather got hotter and drier.
• 0:42
  SPEAKER_00: We threatened the crop.
• 0:44
  SPEAKER_00: But now the weather forecast is changing.
• 0:47
  SPEAKER_00: Some of the heat hangs around, as you can see on some maps on page two.
• 0:51
  SPEAKER_00: Some of the heat hangs around, but the dryness looks to be leaving.
• 0:54
  SPEAKER_00: Next week and beyond, most of the corn belt returns to normalish type rainfall.
• 0:59
  SPEAKER_00: And with this change in the weather forecast, we have seen those same speculators decide to exit those long positions.
• 1:08
  SPEAKER_00: On Monday and then yesterday, we saw some very large selling from speculators.
• 1:13
  SPEAKER_00: However, I fully believe that we have already done damage to the U.S.
• 1:17
  SPEAKER_00: corn crop.
• 1:18
  SPEAKER_00: I also believe that U.S.
• 1:19
  SPEAKER_00: corn export demand continues to be big and actually is even getting bigger.
• 1:25
  SPEAKER_00: Longer term, it is very easy to write a bullish story for corn.
• 1:29
  SPEAKER_00: But these next one to two weeks, we could see all kinds of erratic day-to-day price action.
• 1:35
  SPEAKER_00: And I mentioned two weeks because USDA will issue its August crop production report on August 12th.
• 1:41
  SPEAKER_00: So that's our next big hurdle we got to get past.
• 1:44
  SPEAKER_00: So we continue to see CBOT corn bounce around erratically in the near term, and longer tour longer term, we continue to be bullish.
• 1:54
  SPEAKER_00: Moving on to soybeans, uh CBOT soybeans pretty much took it on the chin yesterday.
• 2:00
  SPEAKER_00: Like corn, this was hugely speculators getting out of longs.
• 2:04
  SPEAKER_00: But the story behind the scenes for soybeans really has not changed.
• 2:07
  SPEAKER_00: U.S.
• 2:07
  SPEAKER_00: crush margins are still very strong.
• 2:10
  SPEAKER_00: U.S.
• 2:10
  SPEAKER_00: meal export demand remains decent.
• 2:12
  SPEAKER_00: China continues to buy U.S.
• 2:14
  SPEAKER_00: beans.
• 2:15
  SPEAKER_00: And actually, Chinese crush rate for the month of July is very likely a new monthly record.
• 2:20
  SPEAKER_00: So U.S.
• 2:21
  SPEAKER_00: soybean export, U.S.
• 2:23
  SPEAKER_00: soybean demand, crush and export demand remains huge.
• 2:27
  SPEAKER_00: The U.S.
• 2:27
  SPEAKER_00: soybean crop still has a long, long ways to go, and these better range will help.
• 2:34
  SPEAKER_00: Then we've also, in the meantime, got crude oil moving around four to five dollars a day, and that does not help with the volatility at all.
• 2:44
  SPEAKER_00: I remain in the camp that CBOT soybeans should be well supported at least until we get to this August 12th crop report and we see what USDA says.
• 2:56
  SPEAKER_00: I've got a chart on the bottom of page one that is Mississippi River Levels at Cruthersville, Missouri.
• 3:04
  SPEAKER_00: Um and currently it's sitting, you know, what, 12 feet or so, 11 feet or so this morning.
• 3:13
  SPEAKER_00: And that's right around normal for this time of year.
• 3:16
  SPEAKER_00: But it is forecast to drop to four feet in the next two weeks.
• 3:22
  SPEAKER_00: Uh so all this dryness that we've had the last several weeks is finally starting to play out on the river levels.
• 3:29
  SPEAKER_00: Now, this is not at a level where we hit the panic mode yet where we start slowing down grain export flows, but we do need to watch this.
• 3:41
  SPEAKER_00: Moving on to weather, uh, we've got a decent system coming across um eastern South Dakota into Minnesota, Iowa, down in Illinois the next three days, and it's supposed to give a general one inch uh across that area, and they desperately need it.
• 3:58
  SPEAKER_00: And then we've got normal-ish type range next week.
• 4:02
  SPEAKER_00: However, temperatures remain well above normal uh for the foreseeable future, and particularly in the plain states.
• 4:10
  SPEAKER_00: Um temperatures kind of back off the next day or two, but then they return and they're smoking hot in the plains over the weekend.
• 4:18
  SPEAKER_00: And you can see I've got maps for Sunday and Monday, and you've got high temperatures in the hundreds from Texas all the way up into uh North Dakota.
• 4:28
  SPEAKER_00: So core crops in that area just continue to get uh slapped in the face.
• 4:33
  SPEAKER_00: And longer term, it looks like uh we stay warm, uh, not smoking hot uh after next week's heat kind of dissipates in the plains, but at least warm but normalish type raids.
• 4:48
  SPEAKER_00: That's it for today.
• 4:50
  SPEAKER_00: Thanks for listening.
• 4:50
  SPEAKER_00: We'll be back tomorrow.