Latest / M6 Capital Daily Market Podcast / Daily Market Podcast Oct 5

Transcript

Daily Market Podcast Oct 5 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:01
  SPEAKER_00: This is Chris Myers of William Six Capital Management with our daily market letter on Monday morning, October 5th.
• 0:06
  SPEAKER_00: Walking in this morning, December corn is up two cents at 4.99 and three quarters.
• 0:11
  SPEAKER_00: November beans are up nine and a half at$12.87 and three quarters.
• 0:15
  SPEAKER_00: December meal is up 50 cents this morning, and November crude is down a dollar at 9.10.
• 0:22
  SPEAKER_00: As far as corn news this morning, uh on Friday, we got another farmer-based survey U.S.
• 0:29
  SPEAKER_00: yield estimate.
• 0:30
  SPEAKER_00: This one from SP Global.
• 0:32
  SPEAKER_00: That's the old Informa group or the old Sparks companies from years ago.
• 0:38
  SPEAKER_00: They lowered the U.S.
• 0:39
  SPEAKER_00: corn yield 1.2 bushels to 178.8.
• 0:45
  SPEAKER_00: Just to put that in a frame of reference, lowering the yield one bushel does not offset the higher corn stocks number that we got from USDA at the end of September.
• 0:55
  SPEAKER_00: That increase in corn stocks is equivalent to two bushels of the U.S.
• 1:00
  SPEAKER_00: yield.
• 1:01
  SPEAKER_00: And if we just take the number straight up, a 178.8 is not bullish at all.
• 1:07
  SPEAKER_00: Matter of fact, uh, if this is the yield that USDA gives us in their October crop production report, which will come out on Friday morning, then CBOT corn is heading lower.
• 1:18
  SPEAKER_00: U.S.
• 1:19
  SPEAKER_00: harvest is progressing nicely, should make big progress this week.
• 1:23
  SPEAKER_00: We're getting in more and more yield reports, and we should have enough yield reports in the next one to two days to draw some pretty meaningful conclusions before Friday's report.
• 1:33
  SPEAKER_00: When I get those done, I'll let everybody know.
• 1:35
  SPEAKER_00: Meanwhile, speculators continue to get smaller.
• 1:38
  SPEAKER_00: They are selling out of their longs in CBOT corn.
• 1:42
  SPEAKER_00: There's big technical support for D Summer Corn at last week's low of 494.
• 1:47
  SPEAKER_00: If and when we take that out, watch out below.
• 1:50
  SPEAKER_00: It could be a free fall.
• 1:52
  SPEAKER_00: I still see the path to least resistance is lower in the near term for corn.
• 1:57
  SPEAKER_00: USD's yield report yield on Friday needs to be in the 175-176 range, or we risk a big sell-off.
• 2:06
  SPEAKER_00: This morning it's just quite frankly hard to find bullish news.
• 2:12
  SPEAKER_00: As far as soybean news, um the yield report from SP Global was 52.8 bushels per acre.
• 2:19
  SPEAKER_00: This would be unchanged from USDA's September yield forecast, and this is not a bullish yield.
• 2:28
  SPEAKER_00: I've got a chart on the bottom of page one that has um uh FOB or export soybean prices from U.S.
• 2:36
  SPEAKER_00: Gulf, Brazil, and Argentina.
• 2:39
  SPEAKER_00: And as you can see from that report, U.S.
• 2:42
  SPEAKER_00: is too expensive and we are not competitive.
• 2:45
  SPEAKER_00: Uh, Argentina is much cheaper for the next several months.
• 2:49
  SPEAKER_00: Brazil is much cheaper, like hugely cheaper come January when they are going to be harvesting beans.
• 2:56
  SPEAKER_00: So, NetNeck, the U.S.
• 2:58
  SPEAKER_00: is losing uh soybean export business.
• 3:00
  SPEAKER_00: U.S.
• 3:01
  SPEAKER_00: harvest should progress nicely this week.
• 3:04
  SPEAKER_00: So crushed plants in Iowa will get plenty of beans to run on, and meal prices uh should remain weak.
• 3:10
  SPEAKER_00: Uh, as far as veg oil prices, global vegetable prices are the lowest in months.
• 3:17
  SPEAKER_00: Malaysia palm oil, which is the largest traded veg oil in the world, is currently the lowest price it's been in six months.
• 3:24
  SPEAKER_00: Uh, planning progress in South America and weather in South America is mostly okay.
• 3:29
  SPEAKER_00: Maybe we're a little bit wet in Paraná, but not a big deal.
• 3:33
  SPEAKER_00: NetNet, it is hard to find bullish news to keep CBOT swabbing prices at the current levels, much less uh going higher from here.
• 3:43
  SPEAKER_00: Uh as far as weather, we're wide open for the next five days.
• 3:47
  SPEAKER_00: And then in the six to ten day, it's very light scattered rains.
• 3:51
  SPEAKER_00: So U.S.
• 3:52
  SPEAKER_00: swimbeing and corn harvest should make big progress in the next uh seven to ten days.
• 3:58
  SPEAKER_00: As far as South America, really the only thing uh noteworthy um this morning is that the state of Paranag is getting pretty heavy rains.
• 4:08
  SPEAKER_00: Uh that system just seems to be sitting there.
• 4:11
  SPEAKER_00: So not harvest, sorry, planting, uh soybean planting is going to be slow in Paraná.
• 4:17
  SPEAKER_00: Not a big deal yet.
• 4:19
  SPEAKER_00: Uh the land is pretty rolling there, the soils dry out very quickly, and they're still very early in the planning progress.
• 4:26
  SPEAKER_00: So, net net not a huge deal yet.
• 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.