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Transcript

Daily Market Podcast Nov 2 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:00
  SPEAKER_00: This is Chris Myers with M6 Capital Management with our daily market letter on Monday morning, November 2nd.
• 0:05
  SPEAKER_00: Walking in this morning, D Summer corn is up three and three quarters at 451 and a quarter.
• 0:10
  SPEAKER_00: January soybeans are down one and three quarters at$12.20.5.
• 0:14
  SPEAKER_00: DCMR Meal is up$1.20 and D Summer Crude is down$460 this morning.
• 0:20
  SPEAKER_00: As far as corn news, the corn market is in the middle of changing.
• 0:24
  SPEAKER_00: Over the last month, speculator selling has been the driving force, pushing us lower.
• 0:30
  SPEAKER_00: But as of today, speculators in the CBFT corn market are basically out.
• 0:34
  SPEAKER_00: Last week they sold 90,000 contracts of CBFT corn.
• 0:39
  SPEAKER_00: The last four weeks combined, they have sold just over 320,000 contracts.
• 0:45
  SPEAKER_00: Over this last four-week time period, we had U.S.
• 0:48
  SPEAKER_00: corn harvest occurring and the relating farmer selling right off the combine.
• 0:52
  SPEAKER_00: As of today, we estimate that U.S.
• 0:55
  SPEAKER_00: corn harvest is around 70 to 72 percent complete.
• 0:58
  SPEAKER_00: We'll get a USD report on that this afternoon.
• 1:01
  SPEAKER_00: This should mean that farmer selling is mostly done.
• 1:05
  SPEAKER_00: At the same time, we've seen global corn trade back off.
• 1:08
  SPEAKER_00: If you recall, global corn export demand uh was record large month after month after month this summer.
• 1:15
  SPEAKER_00: Well, September and October global trade volumes have backed off a little.
• 1:20
  SPEAKER_00: Crops are still big in South America, weather's okay, mostly okay.
• 1:25
  SPEAKER_00: Uh so we have big global corn supplies and slipping global corn demand.
• 1:30
  SPEAKER_00: And that should limit the upside for corn.
• 1:33
  SPEAKER_00: But in the near term, it may be hard to push corn, the corn market much lower because you're gonna have the lack of speculator selling andor farmer selling.
• 1:43
  SPEAKER_00: So we may see CBOT corn trade mostly sideways for a while.
• 1:47
  SPEAKER_00: Longer term, if we make these massive massive crops in South America, CBOT corn should head below$4.25.
• 1:55
  SPEAKER_00: But that may be a few months down the road.
• 1:57
  SPEAKER_00: These crops have a long, long ways to go.
• 2:00
  SPEAKER_00: As far as soybean news, over the last eight weeks, we have seen U.S.
• 2:04
  SPEAKER_00: soybean oil prices decline 10%, actually a little over 10%.
• 2:10
  SPEAKER_00: And it now appears that U.S.
• 2:12
  SPEAKER_00: soybean oil is back at competitive levels with imported palm oil and imported used cooking oil.
• 2:18
  SPEAKER_00: And those two, we've talked about this, those two have been the ones feeding into renewable diesel production.
• 2:24
  SPEAKER_00: So maybe soybean oil has bought back some demand that should limit the downside in CBOT soybean oil, especially if diesel and crude oil prices stay elevated like they are right now.
• 2:37
  SPEAKER_00: U.S.
• 2:37
  SPEAKER_00: meal prices continue to slide lower and lower.
• 2:41
  SPEAKER_00: With this break in both bean oil and meal the last several weeks, we have seen U.S.
• 2:45
  SPEAKER_00: crush margins lose 30 to 40 cents.
• 2:48
  SPEAKER_00: But crush margins remain, still remain over$2 a bushel.
• 2:52
  SPEAKER_00: In the near term, we should see CBOT soybeans trading mostly sideways, really lacking in overall direction.
• 3:00
  SPEAKER_00: We need meal prices to continue the break if soybeans are going to trade much lower right now.
• 3:07
  SPEAKER_00: But the meal has already broken 13% in the last five weeks.
• 3:11
  SPEAKER_00: That may be hard to do.
• 3:13
  SPEAKER_00: Longer term, the market will focus on South American crops.
• 3:17
  SPEAKER_00: If the crops are as big as we expect, we could see CBOT swill beings trade between$1,150 and$12.
• 3:24
  SPEAKER_00: But that may be January, February time period of 2027.
• 3:28
  SPEAKER_00: Between now and then, the market will hugely focus on South American crops.
• 3:33
  SPEAKER_00: On the bottom of page one today, I have a chart of the last several months of CBOT corn prices and speculator positions.
• 3:42
  SPEAKER_00: So you can see that's what drove us higher, and that's what has driven us back lower.
• 3:48
  SPEAKER_00: As far as weather goes, it looks like the corn belt is going to be wet for the next several days and then wide open next week.
• 3:54
  SPEAKER_00: So corn harvest is going to slow down this week and then continue pick back up next week.
• 4:00
  SPEAKER_00: As far as South America weather, Paraná, South part of Brazil, is still just getting pounded with rains.
• 4:07
  SPEAKER_00: We're to the point now where that may be limiting some the some soybean area.
• 4:12
  SPEAKER_00: The last part of planting at Paraná may be delayed, or you may have farmers who just walk away.
• 4:19
  SPEAKER_00: As far as Argentina, great soil moisture uh across most areas.
• 4:24
  SPEAKER_00: And next week looks like they're going to be wide open, so planting should just be blowing and going down there.
• 4:29
  SPEAKER_00: That's it for today.
• 4:30
  SPEAKER_00: Thanks for listening.
• 4:31
  SPEAKER_00: We'll be back tomorrow.