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Daily Market Podcast Jun 2 · M6 Capital Daily Market Podcast

• 0:00
  Good morning.
• 0:01
  This is Chris Myers with M6 Capital Management with our daily market letter on Tuesday, June 2nd.
• 0:07
  Walking in this morning, December corn is down two and a quarter at 470 and a quarter.
• 0:11
  November soybeans are down one and three quarters at 1187.
• 0:15
  July crude is down 130 at 90.90.
• 0:20
  On to corn news, yesterday USDA reported that U.S.
• 0:23
  corn planting was 93% complete, with Kansas, Ohio, and Pennsylvania basically being the only three states that are running behind.
• 0:33
  I still believe that we may lose some corn acres in these three states.
• 0:36
  In its weekly crop progress report, USDA also rated 67% of the U.S.
• 0:42
  corn crop in good to excellent condition.
• 0:44
  This will be the most closely tracked measure that the market will watch to gauge if the crop is doing okay or not.
• 0:51
  So I'll be reporting on that each um Tuesday after USDA reports it on Monday.
• 0:58
  I've got a chart, and today you can see in the chart that this rating of 67% good to excellent is slightly below average, but nothing horrible.
• 1:08
  The states that are in bad shape as of this first report is Texas, Colorado, and Nebraska due to their dryness, and Ohio because it's been so wet.
• 1:21
  And that's also led to the uh late planning progress in Ohio.
• 1:25
  The rest of the states are all somewhere close to average ratings for this time of year.
• 1:31
  Meanwhile, U.S.
• 1:32
  weekly corn exports remain very strong.
• 1:35
  Last week we exported 68 million bushels.
• 1:39
  This is well above the 53 million bushel pace that we need to reach USDA's export forecast.
• 1:45
  So there is no doubt USDA will eventually need to increase their corn export forecast a lot.
• 1:53
  As for CBOT yesterday and it appears again overnight, we continue to see speculators liquidating along positions in corn in CBOT corn.
• 2:04
  Right now, we really have to wonder if speculators continue this liquidation until we either get news on this China deal or we have some type of U.S.
• 2:16
  crop issue.
• 2:17
  If either one of those happens, we race higher.
• 2:21
  So I continue to be longer-term bullish, and I see this liquidation and this break as a chance for end users to extend coverage.
• 2:30
  Moving on to soybeans, yesterday crude oil rallied on both the U.S.
• 2:36
  and Iran, uh Iran ceasefire violations, and that drug soybean oil higher to new contract highs.
• 2:44
  As for CBFT soybeans, that market is kind of in a conundrum right now.
• 2:51
  U.S.
• 2:51
  soybean planning has gone really good, and soybean acres are very likely larger than what USDA estimated in March.
• 3:00
  And new crop USB, uh U.S.
• 3:03
  soybean export sales are pitiful.
• 3:07
  All of those are relatively bearish.
• 3:10
  But if China does come in and begin buying U.S.
• 3:13
  beans, which we firmly believe will happen, this is from the 25 million ton agreement from last October, then soybean prices, soybean prices race back higher.
• 3:24
  That sets the stage for a very volatile summer.
• 3:28
  So for the near term, U.S.
• 3:30
  crop ratings are slightly below normal.
• 3:33
  You can see in the chart, uh, and speculators seem to be a mode of getting positions smaller.
• 3:39
  So maybe for the time being, we grind lower until we get some news on China.
• 3:44
  I remain bullish CBOT soybeans longer term.
• 3:50
  As for weather this morning, we've still got this uh system that's gonna give us one to two inch rains uh across parts of uh Texas, Oklahoma, Kansas, Nebraska, and the Dakotas.
• 4:05
  Um and that's the next several days.
• 4:08
  And then following that, uh we go into uh kind of general light rains across the Corn Belt in the 6 to 10.
• 4:19
  Uh really no alarming weather there.
• 4:22
  However, I do have a map that I've put in today's report on, uh, and I'll put this in from time to time if there's something interesting.
• 4:30
  This is a map from USG's crop report yesterday of their topsoil moisture ratings state by state.
• 4:36
  And this is the percent rated short to very short.
• 4:39
  And you can see Texas, Oklahoma, Kansas, Colorado, and North Nebraska and Dakotas into Montana are well below average.
• 4:51
  They uh they all have very high ratings of short to very short moisture.
• 4:57
  They're all dry.
• 4:58
  So, again, that is an area that we really need to watch uh this summer.
• 5:02
  That's all I have for today.
• 5:04
  Thanks for listening.
• 5:04
  We'll be back tomorrow.