Latest / M6 Capital Daily Market Podcast / Daily Market Podcast Oct 1

Transcript

Daily Market Podcast Oct 1 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:01
  SPEAKER_00: Chris Myers with M6 Capital Management with our daily market letter on Thursday morning, October 1st.
• 0:06
  SPEAKER_00: Walking in this morning, December corn is up two and a quarter at 503.
• 0:11
  SPEAKER_00: November soybeans are unchanged at$12.93.
• 0:14
  SPEAKER_00: December meal is also unchanged at$3.57.
• 0:18
  SPEAKER_00: November crude is up$1.50 at$91.90 this morning.
• 0:22
  SPEAKER_00: As far as corn news this morning, yesterday we mentioned the risk of speculators getting out of their massive long positions.
• 0:29
  SPEAKER_00: We were in a situation where the bull needed to be fed more and more bullish news.
• 0:34
  SPEAKER_00: Well, the USDA stocks report yesterday did not provide bullish news.
• 0:38
  SPEAKER_00: It was quite the opposite.
• 0:39
  SPEAKER_00: The corn stocks estimate was much larger than the average market guess, and CBOT corn broke 18 cents in the first minute after the report came out.
• 0:48
  SPEAKER_00: And prices never recovered.
• 0:50
  SPEAKER_00: Speculators sold at least 30,000 contracts of corn yesterday, but they're still long over 350,000 contracts.
• 0:58
  SPEAKER_00: So now we have a problem.
• 1:01
  SPEAKER_00: Throughout the history of the corn market, we have witnessed over and over and over when the speculator has a big position and starts getting out, they get out of everything.
• 1:11
  SPEAKER_00: So we could easily see a lot more speculator selling in the next two to three weeks.
• 1:17
  SPEAKER_00: Does that push prices lower?
• 1:19
  SPEAKER_00: Does that stop a small rally?
• 1:21
  SPEAKER_00: Not sure how to call that one, but it's pretty easy to argue that for the next few weeks it will be very hard to get a rally.
• 1:29
  SPEAKER_00: Meanwhile, U.S.
• 1:30
  SPEAKER_00: export corn prices remain too high.
• 1:32
  SPEAKER_00: We are still losing export business.
• 1:34
  SPEAKER_00: Weather in South America is okay, and U.S.
• 1:37
  SPEAKER_00: tarvest should make big progress in the next two weeks.
• 1:40
  SPEAKER_00: So today, it's hard to find bullish news.
• 1:43
  SPEAKER_00: The path of least resistance in the near term should be lower.
• 1:47
  SPEAKER_00: As far as soybean news, this USDA stocks report was a complete non-event yesterday.
• 1:53
  SPEAKER_00: The stock assessment was very close to the average market, yes, so it appears that the soybean market has a similar problem to the corn market today.
• 2:02
  SPEAKER_00: A big spec long and lacking bullish news.
• 2:05
  SPEAKER_00: The Chinese meetings last week resulted in nothing.
• 2:08
  SPEAKER_00: The U.S.
• 2:09
  SPEAKER_00: soybeans are too expensive and we're losing the export business.
• 2:12
  SPEAKER_00: Planning weather in South America is getting better.
• 2:16
  SPEAKER_00: We still do have very firm meal prices in the U.S.
• 2:19
  SPEAKER_00: due to lack of harvest and slow crush rates in Iowa, but that should get resolved in the next 10 to 15 days.
• 2:26
  SPEAKER_00: So it is becoming harder and harder to find bullish news to support CBFT soybeans.
• 2:31
  SPEAKER_00: With this big spec long, we could easily see soybeans trade steady to lower in the coming weeks and months.
• 2:38
  SPEAKER_00: Longer term, if South American soybean crops are okay, we could trade quite a bit lower.
• 2:44
  SPEAKER_00: But that is a long ways out.
• 2:46
  SPEAKER_00: That's next spring, and we still have a lot of South American growing season in front of us.
• 2:52
  SPEAKER_00: As far as weather this morning, the remnants of uh this hurricane out of the Pacific uh is in eastern Texas, Oklahoma, and Arkansas the next two, three days, and then it slowly migrates to the east.
• 3:05
  SPEAKER_00: Uh, the Corn Belt, um Nebraska, North, Iowa, North.
• 3:10
  SPEAKER_00: Um, they should have basically wide open weather for the next 10 days.
• 3:15
  SPEAKER_00: So harvest should make big progress.
• 3:19
  SPEAKER_00: First South American weather.
• 3:20
  SPEAKER_00: Um, most of the areas of South America are doing better, doing okay for rain.
• 3:26
  SPEAKER_00: We do have too much rain coming in Paraná, Brazil.
• 3:30
  SPEAKER_00: Um, most of Parana is supposed to get somewhere between six and ten inches of rain in the next 10 days.
• 3:36
  SPEAKER_00: Um, yes, that's going to slow or completely halt uh planning in some areas, but that's at this point in the game, that's just not that big of a deal.
• 3:45
  SPEAKER_00: So um, anyway, that's it for today.
• 3:48
  SPEAKER_00: We'll be back tomorrow.
• 3:49
  SPEAKER_00: Thanks for listening.