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Transcript

Daily Market Podcast Jun 11 · 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, June 11th.
• 0:07
  SPEAKER_00: Walking in this morning, December corn is down two and a quarter at 444 and three quarters.
• 0:12
  SPEAKER_00: November beans is down a quarter at 11.30.
• 0:15
  SPEAKER_00: July crude oil is down$1.10 at$88.90.
• 0:20
  SPEAKER_00: We've got the USDA has got to issue their wisdom report today.
• 0:24
  SPEAKER_00: That's their World Agricultural Supply and Demand Estimates.
• 0:28
  SPEAKER_00: That would be at 11 o'clock central time.
• 0:30
  SPEAKER_00: This is the monthly report where USDA makes changes to their global and to USDA supply-demand estimates for grains and cotton and rice and whatnot.
• 0:41
  SPEAKER_00: So we do not expect USDA to make very many changes in this report.
• 0:50
  SPEAKER_00: I can argue that USDA is way too low on their U.S.
• 0:54
  SPEAKER_00: corn export forecast, but historically USDA makes those changes to the balance sheets very slowly.
• 1:02
  SPEAKER_00: So who knows if they're going to make that change uh this month or not?
• 1:05
  SPEAKER_00: I would not be shocked if they don't.
• 1:08
  SPEAKER_00: However, whenever those numbers are, when those numbers are released at 11 o'clock, I will send out an email uh with their data and have some comments on that.
• 1:16
  SPEAKER_00: As for core news this morning, um, weekly U.S.
• 1:20
  SPEAKER_00: ethanol production remains uh pretty decent, not huge, but decent.
• 1:24
  SPEAKER_00: Ethanol margins remain big.
• 1:26
  SPEAKER_00: Ethanol, uh U.S.
• 1:27
  SPEAKER_00: ethanol exports remain quite large, which is helping march.
• 1:31
  SPEAKER_00: As for U.S.
• 1:32
  SPEAKER_00: crops, the weather forecast remains uh very much non-threatening.
• 1:37
  SPEAKER_00: Uh, you can see that on page two of the report.
• 1:40
  SPEAKER_00: However, we are losing corn crops in Europe.
• 1:43
  SPEAKER_00: Um, I mentioned some of this yesterday.
• 1:46
  SPEAKER_00: This week we've had two different analyst groups in Europe come out with smaller corn crop estimates, partly due to a smaller area, partly due to prolonged dryness in Spain, France, and Italy, where precip the last six weeks has ranged between 20 to 40 percent of normal across that area.
• 2:03
  SPEAKER_00: And France is uh the largest corn producer in Europe.
• 2:08
  SPEAKER_00: Uh, if we uh look at their total numbers here in Europe, it looks like we're gonna have one of the, if not the smallest corn crop in 10 years in Europe.
• 2:22
  SPEAKER_00: And ultimately that means more corn import demand.
• 2:25
  SPEAKER_00: Okay.
• 2:26
  SPEAKER_00: Um, as for CBOT corn, we continue to bounce around looking for direction the last few days.
• 2:31
  SPEAKER_00: It seems like this this round of spec selling is uh over, but we need a reason to rally.
• 2:38
  SPEAKER_00: And today we just don't have that.
• 2:40
  SPEAKER_00: Um, weather's non-threatening, we don't have China.
• 2:44
  SPEAKER_00: So I remain longer-term bullish uh CBOT corn, largely due to this expected Chinese export business.
• 2:53
  SPEAKER_00: As for soybeans, um, the volatility of this US-Iran uh mass conflict, war, whatever you want to call it, has caused uh crude oil to bounce all over the place.
• 3:04
  SPEAKER_00: And by default, soybean oil follows.
• 3:07
  SPEAKER_00: As for meal, um, we should get a NOPA crush estimate, uh, National Oil Seed Process Association estimate for May Crush on Monday.
• 3:18
  SPEAKER_00: Uh, and this should show May U.S.
• 3:20
  SPEAKER_00: soybean crush up around 11% from last year, is what we expect.
• 3:26
  SPEAKER_00: Big margins make for big crush rates, but meal export demand is falling.
• 3:33
  SPEAKER_00: So we may uh these crushers may have uh an issue with too much meal just right around the corner.
• 3:40
  SPEAKER_00: Export meal prices from Brazil and Argentina are both$20 to$30 a ton cheaper than uh U.S.
• 3:48
  SPEAKER_00: Gulf meal uh for the next several months.
• 3:50
  SPEAKER_00: There is no question U.S.
• 3:53
  SPEAKER_00: meal export demand is slowing down.
• 3:55
  SPEAKER_00: Meanwhile, Chinese crush rates are super, super strong.
• 3:59
  SPEAKER_00: Crush last week in China, swimming crush, was the largest week in almost a year.
• 4:05
  SPEAKER_00: Um so they do have the decent uh uh import demand for beans.
• 4:12
  SPEAKER_00: Uh soybean market right now is just very easily being knee-jerked around by whatever outside force there is.
• 4:20
  SPEAKER_00: Uh, it has nothing to drive a direction right now.
• 4:25
  SPEAKER_00: If when this Chinese business shows up, uh CBOT soybeans should rally.
• 4:31
  SPEAKER_00: But with the massive crops in South America and a very large crop coming in the U.S., longer term it's hard to be bullish.
• 4:38
  SPEAKER_00: Uh, CBOT soybeans.
• 4:40
  SPEAKER_00: Near term, if and when this Chinese business gets done, CBOT beans rally, but longer term not so much.
• 4:49
  SPEAKER_00: As for weather today, um, we continue to have decent rains across the center of the country and particularly the southeast.
• 4:57
  SPEAKER_00: Um and it looks like uh this Oklahoma to Georgia area is going to have very large rains uh for the foreseeable future.
• 5:12
  SPEAKER_00: So um uh in the one to five and the six to ten day time period, um, and if you look further down the road, even eight to fourteen day time period, we still expect normal to above normal rains.
• 5:25
  SPEAKER_00: So, right now, no crop issues uh in the center of the country or the mid south.
• 5:32
  SPEAKER_00: Thanks for listening.
• 5:33
  SPEAKER_00: That's all for today.
• 5:34
  SPEAKER_00: I will shoot an email out uh at 11 this morning when the USDA data comes out.
• 5:39
  SPEAKER_00: Thanks.