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Transcript

Daily Market Podcast Jun 29 · 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 Monday, June 29th.
0:06
SPEAKER_00: Walking in this morning, December corn is down 7.5 at 434.
0:10
SPEAKER_00: November soybeans are down nine and a quarter at 11.47.
0:14
SPEAKER_00: August crude is up 60 cents at 6980.
0:18
SPEAKER_00: A couple of things before we get to corn and soybeans today.
0:23
SPEAKER_00: The US Iran memo of understanding.
0:26
SPEAKER_00: First, over the weekend, the ceasefire went straight down the toilet.
0:30
SPEAKER_00: Iran seems to believe that they control the Strait of Hermuz and demands that every ship travel through its waters rather than traveling on the other side of the strait near Oman and UAE.
0:42
SPEAKER_00: Over the weekend, Iran fired drones at a ship that did not follow those instructions.
0:47
SPEAKER_00: Then the U.S.
0:48
SPEAKER_00: military had again engaged and they shot down those drones.
0:52
SPEAKER_00: Iran seems to have a very different thought on multiple issues.
0:59
SPEAKER_00: One, navigating the Strait of Hormos, two, Iran's nuclear activities going forward.
1:05
SPEAKER_00: Three, who controls Hezbollah and are they involved in the memo of understanding?
1:11
SPEAKER_00: And four, when and how do sanctions relief occur?
1:16
SPEAKER_00: So I'm not sure what you really call this thing today, other than it's a giant misunderstanding, and this thing is long from over.
1:23
SPEAKER_00: Also, we've got two key USDA reports tomorrow.
1:27
SPEAKER_00: One is USDA will issue its June Acreage Report, and the other one is the June 1 green stocks report.
1:35
SPEAKER_00: Both of those will be issued tomorrow morning at 11 a.m.
1:38
SPEAKER_00: Central Time.
1:39
SPEAKER_00: This will be the first acreage update from USDA since March.
1:43
SPEAKER_00: And at the bottom of page one, I've got the average market guesses, which we'll discuss below.
1:48
SPEAKER_00: As for Core News, on Friday we mentioned that the weather models did not know how to handle this high pressure in the plain states.
1:55
SPEAKER_00: Well, walking in this morning, it seems that that uh it seems that the high pressure system migrates east across the country.
2:02
SPEAKER_00: It causes several days of dry weather and some warm temperatures, and then we move back into normal-ish type precip.
2:10
SPEAKER_00: Temperatures stay warm this week across the nation with some 90s, 95s, and even some isolated 100s.
2:18
SPEAKER_00: But precip next week and beyond looks to be rather normal.
2:21
SPEAKER_00: So, net net, no lasting impact from this high pressure system.
2:25
SPEAKER_00: As for USDA reports, the big number to watch tomorrow would be corn planted area.
2:31
SPEAKER_00: As you can see in the table I've got listed at the bottom of page one, the average market guess is for corn plantings to be down 200,000 acres from what USDA estimated in March.
2:42
SPEAKER_00: But the range is from down, the range of estimates is from down 1.3 million to up 1.1 million.
2:51
SPEAKER_00: So we have some very different opinions on planted area.
2:55
SPEAKER_00: Historically, this June acreage report is a very volatile day for CBOT grain markets, and this thing tomorrow could could easily be very volatile.
3:06
SPEAKER_00: Moving on to soybeans, as for soybean acres in this report tomorrow, the market is looking for U.S.
3:12
SPEAKER_00: soybean plantings to be up 500,000 acres from the March report.
3:18
SPEAKER_00: The big shock would be if soybean acres are down from March.
3:23
SPEAKER_00: Again, this is expected to be a very volatile report.
3:26
SPEAKER_00: Uh, there's typically not many surprises on the stocks, the June 1 stocks numbers.
3:32
SPEAKER_00: So acreage tends to be by far the most important numbers in the reports tomorrow.
3:37
SPEAKER_00: Moving on to meal, um, U.S.
3:40
SPEAKER_00: meal prices continue to hover around recent lows, but we need to be watching what's going on in Argentina.
3:45
SPEAKER_00: Farmers in Argentina, because of this recent price break, they are holding soybeans and selling other grains for cash.
3:53
SPEAKER_00: And we have an ongoing labor union issue with discussions on wages at several crush plants.
4:00
SPEAKER_00: Both of these would threaten meal exports from Argentina, therefore affecting U.S.
4:07
SPEAKER_00: meal export demand.
4:09
SPEAKER_00: Exports slow down in Argentina.
4:11
SPEAKER_00: Our meal exports pick up here.
4:13
SPEAKER_00: Pretty simple.
4:14
SPEAKER_00: So we need to watch what's going on there this week.
4:17
SPEAKER_00: Um, also, late last week, the soybean market got all excited about China in bidding for U.S.
4:22
SPEAKER_00: beans, but purchases so far have been relatively small.
4:26
SPEAKER_00: Thus, the market is uh is back selling off this morning.
4:30
SPEAKER_00: So moving on to weather.
4:33
SPEAKER_00: The one to five day uh time period is when this high transits across the country.
4:38
SPEAKER_00: So you've got pre-delimited rainfall, the six to ten moves back into normally tight precip and beyond.
4:44
SPEAKER_00: Um and I've got we've got several days, uh, Tuesday through oh at least Friday, Saturday of pretty warm temperatures across the southern, particularly the southern areas of the country.
4:58
SPEAKER_00: Um, and I would pretty much draw a line from let's say central Kansas to oh maybe North Carolina, um, and south of that line is gonna have some uh very warm 95 to maybe isolated 100 degree temperatures uh ongoing this entire week.
5:23
SPEAKER_00: And then we've got the you know, if we look at the 6 to 10 or even 8 to 14 day time period, it's mostly normal ish type precip across the corn belt.
5:32
SPEAKER_00: So today we don't have any ongoing threatening weather uh for markets to worry about.
5:38
SPEAKER_00: That's it for today.
5:39
SPEAKER_00: Thanks, we'll be back tomorrow.