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Transcript

Daily Market Podcast May 12 · 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 for Tuesday, May 12th.
• 0:07
  SPEAKER_00: Walking in this morning, July corn is up two and three quarters at 478 and 1 quarter.
• 0:12
  SPEAKER_00: December corn is back above$5 this morning.
• 0:14
  SPEAKER_00: July soybeans are up four and a half at$12.17.5.
• 0:18
  SPEAKER_00: June crude is up$3.20 at$101.30.
• 0:22
  SPEAKER_00: Today is USDA Report Day.
• 0:24
  SPEAKER_00: USDA will issue its monthly WST report, that's the World Agricultural Supply and Demand Estimates at 11 a.m.
• 0:31
  SPEAKER_00: Central Time today.
• 0:32
  SPEAKER_00: This is a big deal.
• 0:34
  SPEAKER_00: This is the first time each year that this May report that USDA provides their global supply and demand estimates for row crops.
• 0:43
  SPEAKER_00: This is also their first effort at a 26-27 crop year balance sheet for corn and soybeans.
• 0:51
  SPEAKER_00: The biggest numbers to watch today will be the U.S.
• 0:54
  SPEAKER_00: ending stocks.
• 1:00
  SPEAKER_00: Moving on to corn, U.S.
• 1:02
  SPEAKER_00: corn planning yesterday was 57% complete.
• 1:05
  SPEAKER_00: This is behind 59% last year and slightly ahead of the average pace of 52%.
• 1:11
  SPEAKER_00: Planning is behind in Kansas and Missouri, also Wisconsin and Michigan, and ahead in every other corn belt state.
• 1:19
  SPEAKER_00: I am still in the camp that U.S.
• 1:21
  SPEAKER_00: corn planted area is very likely smaller than what USDA forecasted in March.
• 1:27
  SPEAKER_00: But we won't get another estimate from USDA until late June.
• 1:31
  SPEAKER_00: As for export demand, weekly export shipments continue to be big, especially to Mexico.
• 1:37
  SPEAKER_00: So far this year, U.S.
• 1:39
  SPEAKER_00: corn exports to Mexico are up 10% from last year.
• 1:45
  SPEAKER_00: And obviously record large.
• 1:47
  SPEAKER_00: We believe this is due to the border being closed to cattle crossing and the huge growth in cattle feeding in Mexico.
• 1:55
  SPEAKER_00: Corn exports are growing from Argentina.
• 1:58
  SPEAKER_00: They remain very slow from Brazil.
• 2:00
  SPEAKER_00: And corn export pace remains slow from Ukraine as well.
• 2:05
  SPEAKER_00: So, with global corn import demand up, that puts a lot more demand back on the U.S.
• 2:12
  SPEAKER_00: If you recall April global corn exports from the top four exporters were the largest ever for the month of April.
• 2:20
  SPEAKER_00: I remain in the camp that CBOT corn should trade steady to higher, but today could be a roller coaster ride with this WASD report.
• 2:28
  SPEAKER_00: The key number to watch will be the 26-27 crop year ending stocks.
• 2:35
  SPEAKER_00: Moving on to soybeans, CBOT soybeans are being supported by a very firm meal market and all the talks ranning this President Trump's meeting with Chinese President Z on Thursday and Friday.
• 2:50
  SPEAKER_00: And on top of that, April soybean imports into China were record large.
• 2:55
  SPEAKER_00: The market is taking that as big Chinese demand.
• 3:00
  SPEAKER_00: I disagree.
• 3:01
  SPEAKER_00: Their hog industry is in shambles in China.
• 3:04
  SPEAKER_00: I believe China is importing massive amounts of South American soybeans and building their stocks so they don't have to buy U.S.
• 3:13
  SPEAKER_00: soybeans at any point in time.
• 3:15
  SPEAKER_00: But maybe we'll be a lot smarter after this meeting.
• 3:18
  SPEAKER_00: Maybe.
• 3:19
  SPEAKER_00: We're still told that the meeting will take place, even though we are still fighting with Iran.
• 3:24
  SPEAKER_00: So we'll see how that goes.
• 3:26
  unknown: U.S.
• 3:27
  SPEAKER_00: soybean planting pace remains four to five days ahead of average.
• 3:31
  SPEAKER_00: Uh, with demand for meal and oil still big and this talk of China, CBOT soybeans should remain well supported, at least for now.
• 3:41
  SPEAKER_00: Longer term, I am fearful that meal export demand starts to back off.
• 3:47
  SPEAKER_00: I've got charts in today's report showing uh U.S.
• 3:50
  SPEAKER_00: corn and soybean planting pace uh versus normal and versus last year.
• 3:54
  SPEAKER_00: As far as weather, the next four or five days should be relatively open.
• 3:59
  SPEAKER_00: You've got some very light scattered showers coming across the corn belt.
• 4:04
  SPEAKER_00: And then once you get into early next week, um Sunday and forward, you and Monday forward, you've got some more rain showing up in the north central part of the cornbelt.
• 4:16
  SPEAKER_00: That's gonna keep those guys wet.
• 4:18
  SPEAKER_00: And remember, they've already got cool temperatures, so maybe planting stays slow in the Minnesota, Wisconsin, Michigan areas.
• 4:27
  SPEAKER_00: Uh, but then you look back at your you look further out, 6 to 10, 8 to 14 day, we've got relatively normal rains and temperatures start to warm back up.
• 4:40
  SPEAKER_00: That's it for today.
• 4:42
  SPEAKER_00: Hope you all have a wonderful day.
• 4:43
  SPEAKER_00: We'll be back tomorrow.
• 4:44
  SPEAKER_00: Thanks for listening.