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Transcript

Daily Market Podcast Jul 16 · 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 Thursday, July 16th.
• 0:06
  SPEAKER_00: Before we get going this morning, um, I need to be on the road traveling today and tomorrow.
• 0:11
  SPEAKER_00: So I may be a little bit slow responding to emails, but give me time, I will respond.
• 0:17
  SPEAKER_00: All right, so walking in this morning, December corn is up one and three quarters at 471 and a quarter.
• 0:23
  SPEAKER_00: November soybeans are up two and a quarter at 12.04.
• 0:27
  SPEAKER_00: September crude is down 20 cents at 78.90.
• 0:32
  SPEAKER_00: As far as corn news this morning, you walk in, it's a new day, it's a new set of issues.
• 0:37
  SPEAKER_00: The bombings have increased from both Russia and Ukraine on grain export facilities and quite a few grain vessels in the Black Sea and the Sea of Azov.
• 0:49
  SPEAKER_00: And therefore, insurance rates have skyrocketed.
• 0:53
  SPEAKER_00: So grain exports from the Black Sea area have basically come to a screeching halt.
• 0:58
  SPEAKER_00: That would be mostly wheat, some corn, some barley.
• 1:02
  SPEAKER_00: So that means that more wheat and corn importing nations that need to find a new source of supplies today.
• 1:12
  SPEAKER_00: So our already strong export business just got stronger.
• 1:19
  SPEAKER_00: At the same time, Paris Matif corn futures advanced further to new contract ties yesterday.
• 1:26
  SPEAKER_00: Given the current estimates of EU's corn crop, most in Europe believe that they have already lost 10 to 12 million tons from their original 53 million ton crop estimate.
• 1:39
  SPEAKER_00: And that eventually means 10 to 12 million tons more corn imports that they need to bring in.
• 1:46
  SPEAKER_00: So, you know, globally, corn import demand stays super strong.
• 1:51
  SPEAKER_00: As for the U.S.
• 1:52
  SPEAKER_00: crop, we still believe that USDA's crop condition ratings on Monday will decline given the heat and the dryness that we had this week.
• 2:01
  SPEAKER_00: We are getting quite a few comments and pictures of corn crops in North Dakota, South Dakota, and Nebraska that seem to be going downhill very fast with this heat.
• 2:12
  SPEAKER_00: Meanwhile, CBOT corn has broken through key resistance at$4.70.
• 2:17
  SPEAKER_00: We're trading$4.71 this morning.
• 2:20
  SPEAKER_00: Maybe we can all this rally this time, maybe not.
• 2:24
  SPEAKER_00: Either way, I still remain very bullish longer term.
• 2:28
  SPEAKER_00: As far as soybeans go, U.S.
• 2:30
  SPEAKER_00: soybean crush continues to run at record levels.
• 2:33
  SPEAKER_00: NOPA, that's the National Oil Seed Processors Association, issued their June soybean crush data yesterday, showing yet another record large month of crush for the U.S.
• 2:46
  SPEAKER_00: U.S.
• 2:47
  SPEAKER_00: soybean crush uh in June was quite a bit bigger than anybody expected it to be.
• 2:53
  SPEAKER_00: Renewable diesel is steadily growing, and surprisingly, U.S.
• 2:59
  SPEAKER_00: meal supplies are not piling up.
• 3:01
  SPEAKER_00: As we have discussed, um, U.S.
• 3:03
  SPEAKER_00: meal exports are down, but domestic use of meal continues to be very strong.
• 3:09
  SPEAKER_00: Also, China, at the same time, China bought several more cargoes of U.S.
• 3:13
  SPEAKER_00: soybeans off the PW yesterday.
• 3:15
  SPEAKER_00: Uh, U.S.
• 3:16
  SPEAKER_00: soybeans continue to be cheaper than Brazil for September, October, and November shipment.
• 3:21
  SPEAKER_00: So we should see more and more U.S.
• 3:25
  SPEAKER_00: soybean export sales showing up, not just to China.
• 3:29
  SPEAKER_00: CBOT November beans are now some 80-81 cents off their lows in June.
• 3:36
  SPEAKER_00: I still contend that longer term it's difficult to be bullish CBOT soybeans.
• 3:42
  SPEAKER_00: But we first need to get an idea of how much new soybean export business we may be doing out of the U.S., being as we are now the cheapest soybeans in the world.
• 3:51
  SPEAKER_00: And with crude and energy market from any firm, bean oil prices remain super strong.
• 3:57
  SPEAKER_00: So we may eventually be in a selling the rally mode, but we're not there yet.
• 4:03
  SPEAKER_00: Uh, I've got a chart on the bottom of page one showing um NOPA crush rates.
• 4:09
  SPEAKER_00: Uh then let's move on to page two.
• 4:12
  SPEAKER_00: Uh, if you look at weather uh precip the next uh five days, it's basically bone dry in the plain states uh and uh across basically the heart of the cornbelt, and then in the six to ten day time period, more of the same.
• 4:31
  SPEAKER_00: Maybe you have some light scattered showers in the corn belt, but not much.
• 4:35
  SPEAKER_00: And interesting enough, the weather models have all turned hotter again for early next week, early and middle part of next week, muddy Tuesday, Wednesday.
• 4:46
  SPEAKER_00: We should see some 100, 105, even some 110 degree temperatures from Nebraska down to oh, let's say northern Texas, uh the Amarillo, even to Dallas area of Texas next week.
• 5:04
  SPEAKER_00: Uh and that coincides with some hotter temperatures across the south.
• 5:09
  SPEAKER_00: Uh, you should be well into the mid to upper 90s, uh, all the way over to Georgia and even the Carolinas.
• 5:16
  SPEAKER_00: And also we've got a map on page two uh showing uh precip in the EU for the next 10 days.
• 5:24
  SPEAKER_00: Again, you have very limited rains in Spain, France, Germany, um, the grain growing areas of Italy.
• 5:32
  SPEAKER_00: So their corn crop that has been kicked in the gut already, uh just it doesn't catch a break.
• 5:39
  SPEAKER_00: So their corn crop continues to get smaller.
• 5:42
  SPEAKER_00: That's it for today.
• 5:43
  SPEAKER_00: Thanks for listening.
• 5:44
  SPEAKER_00: We'll be back tomorrow.