Latest / M6 Capital Daily Market Podcast / Daily Market Podcast Aug 17

Transcript

Daily Market Podcast Aug 17 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:01
  SPEAKER_00: This is Chris Myers with M6 Capital Management with our daily market letter on Monday morning, August 17th.
• 0:07
  SPEAKER_00: Walking in this morning, December corn is up one and a half at 484 and three quarters.
• 0:12
  SPEAKER_00: November soybeans are up six at eleven ninety-eight and a half.
• 0:15
  SPEAKER_00: December meal is up$1.80 at$318.20.
• 0:19
  SPEAKER_00: September crude is up 10 cents at$82.50 this morning.
• 0:24
  SPEAKER_00: As for corn news, last Wednesday's USDA reports gave us a baseline for U.S.
• 0:29
  SPEAKER_00: grain yields, mainly corn and soybeans.
• 0:32
  SPEAKER_00: Now the world will try to decide is the yield higher or lower than that.
• 0:37
  SPEAKER_00: Over the past several days, we've had multiple firms that have sent teams traveling across the central corn belt looking at the corn crop, trying to answer that question.
• 0:46
  SPEAKER_00: We've talked with multiple crop scouts, and the conclusion so far seems to lean towards a corn crop slightly smaller than USDA's number last week.
• 0:56
  SPEAKER_00: Also, to starting today, the annual Pro Farmer Crop Tour begins.
• 1:03
  SPEAKER_00: This is the biggest industry crop tour of the year.
• 1:06
  SPEAKER_00: This tour has meetings each night of the week, and we all know they post a ridiculous amount of stuff on social media.
• 1:14
  SPEAKER_00: So we should get regular updates from this group.
• 1:18
  SPEAKER_00: We have a map on the bottom of page one.
• 1:20
  SPEAKER_00: We have a map of the pro farmer tour locations, and where so you can see where they're going and what states they cover.
• 1:27
  SPEAKER_00: Meanwhile, Russia, over the weekend, Russia continued to bomb Ukrainian port facilities.
• 1:33
  SPEAKER_00: So as of this morning, there is zero grain flowing from Ukrainian uh ports on the Black Sea.
• 1:40
  SPEAKER_00: There's a small amount of grain of Ukrainian grain that is flowing overland into Europe, but nothing flowing from ocean ports.
• 1:49
  SPEAKER_00: Also, as of this weekend, U.S.
• 1:52
  SPEAKER_00: Gulf corn is cheaper, still remains cheaper than Brazil.
• 1:56
  SPEAKER_00: Argentina corn is the cheapest, but they can only execute so much.
• 2:01
  SPEAKER_00: This is a long way of saying that U.S.
• 2:04
  SPEAKER_00: corn export demand remains very strong.
• 2:08
  SPEAKER_00: So my summary point is this U.S.
• 2:11
  SPEAKER_00: export demand remains huge, and now the market could begin questioning a smaller U.S.
• 2:17
  SPEAKER_00: corn crop.
• 2:18
  SPEAKER_00: That is a recipe for CBOT corn remaining firm.
• 2:21
  SPEAKER_00: We remain longer-term bullish CBOT corn.
• 2:25
  SPEAKER_00: As for soybeans, the Pro Farmer Tour this week will offer some comments on beans, and they'll issue some data on the number of pods.
• 2:34
  SPEAKER_00: But that data, we've looked at that data for years and years, and their information and their data is so-so at best.
• 2:41
  SPEAKER_00: The recent rains in the central part of the corn belt, Iowa, Illinois, Indiana, have been a little too much in several areas, and we all know that soybeans don't like wet feet.
• 2:51
  SPEAKER_00: We still have lots of growing season ahead of us for soybeans.
• 2:54
  SPEAKER_00: The weather forecast in the next 10 days does not call for heavy rains in these specific areas of Illinois, Indiana, and uh and um uh Iowa.
• 3:05
  SPEAKER_00: So they'll get a little break here.
• 3:08
  SPEAKER_00: As for U.S.
• 3:08
  SPEAKER_00: uh soybean export demand, that should continue to get bigger and bigger as of prices this weekend.
• 3:14
  SPEAKER_00: U.S.
• 3:14
  SPEAKER_00: Gulf beans are 60 cents a bushel cheaper than Brazil for September, 50 cents a bushel cheaper uh for October, and 40 cents cheaper in November.
• 3:24
  SPEAKER_00: So we continue to get export business.
• 3:27
  SPEAKER_00: China continues to buy U.S.
• 3:29
  SPEAKER_00: soybeans almost daily, but we should see more and more business from Europe and the rest of Asia coming back to the U.S.
• 3:36
  SPEAKER_00: Switching to meal.
• 3:38
  SPEAKER_00: This morning U.S.
• 3:39
  SPEAKER_00: Gulf meal is more expensive than Brazil or Argentina, and the latest export lineups out of Argentina are quite large.
• 3:46
  SPEAKER_00: So until we see meal prices firm in South America or some reason for U.S.
• 3:51
  SPEAKER_00: export business to pick up, it looks like U.S.
• 3:54
  SPEAKER_00: meal will struggle to rally.
• 3:56
  SPEAKER_00: Domestic meal values should continue to erode as we get closer to harvest time.
• 4:02
  SPEAKER_00: As for CBOT soybeans, we are now some 60 cents off their lows last week.
• 4:08
  SPEAKER_00: Crush margins remain huge.
• 4:10
  SPEAKER_00: I continue to believe that CBOT soybeans will remain very well supported, at least until we get into early September and we know more about the U.S.
• 4:19
  SPEAKER_00: crop and how big this export demand is going to be.
• 4:22
  SPEAKER_00: As far as weather forecasts go, um, we've got light scattered rains uh this week uh across the Corn Belt, Nebraska, and east.
• 4:32
  SPEAKER_00: Kansas gets very little and areas to the south.
• 4:36
  SPEAKER_00: In um Oklahoma, Arkansas, uh, Texas, they hardly get any at all.
• 4:44
  SPEAKER_00: And then next week is very, very light scattered showers.
• 4:48
  SPEAKER_00: Um temperatures remain an issue, particularly in the mid-south and southern plains.
• 4:55
  SPEAKER_00: Um today and tomorrow, we should see 100 degrees from the Carolinas all the way over to Texas and Oklahoma.
• 5:02
  SPEAKER_00: Um, and even some 105, 110 degree temperatures up into uh Oklahoma and Kansas tomorrow and Wednesday.
• 5:12
  SPEAKER_00: Uh we could certainly use a break from this heat, um, and the plain states could certainly use more moisture, but that's just not in the cards right now.
• 5:22
  SPEAKER_00: So uh longer term forecast looks like most of the corn belts should remain near normal on precip.
• 5:29
  SPEAKER_00: Uh so the precip outlook is okay, but we just need uh we need these temperatures to back off some.
• 5:36
  SPEAKER_00: That's it for today.
• 5:37
  SPEAKER_00: Thanks for listening.
• 5:38
  SPEAKER_00: We'll be back tomorrow.