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Transcript

Daily Market Podcast Jul 29 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:00
  SPEAKER_00: This is Chris Myers with M6 Capital Management with our daily market letter on Wednesday, July 29th.
• 0:07
  SPEAKER_00: Walking in this morning, we got De Summer corn down three cents at 477.25.
• 0:12
  SPEAKER_00: November beans are down 13 and a quarter at 12.06 and three quarters.
• 0:16
  SPEAKER_00: December meal is down$4.30 at$323.50.
• 0:22
  SPEAKER_00: September crude is back up this morning.
• 0:24
  SPEAKER_00: It's up$5.40 at$84.60.
• 0:28
  SPEAKER_00: As far as corn news this morning, the Weddham weather models continue to shift the high pressure system back south and west away from the grain growing areas.
• 0:37
  SPEAKER_00: I've got a chart of uh I've got maps uh relating to this on page two.
• 0:42
  SPEAKER_00: So what does that mean?
• 0:43
  SPEAKER_00: Well, we've had the high pressure system over Kansas and Nebraska, and that's basically what has created this hot dry weather scenario for the last two weeks.
• 0:52
  SPEAKER_00: So high pressure system moving allows for more normal precip next week and beyond in the corn belt.
• 1:00
  SPEAKER_00: But meanwhile, we have dryness this week and we still have some smoking hot temperatures in the plain states.
• 1:06
  SPEAKER_00: So U.S.
• 1:07
  SPEAKER_00: corn condition ratings continue to decline next week, soil moisture continues to decline into next week, and all of this is happening at the highest water use phase for the bulk of the corn belt, right after corn pollination.
• 1:22
  SPEAKER_00: And then let's throw in the USDA crop production report on August 12th.
• 1:26
  SPEAKER_00: That's the report where USDA will use farmer surveys to update their estimate of U.S.
• 1:31
  SPEAKER_00: corn yield, and that report typically resets the market outlook.
• 1:35
  SPEAKER_00: So I say all that to say this the biggest unknown in the market today is still the U.S.
• 1:42
  SPEAKER_00: corn crop.
• 1:43
  SPEAKER_00: And the market is getting a lot of mixed signals today, and we have a very big USDA report coming up in two weeks.
• 1:50
  SPEAKER_00: So between now and then, CBOT corn market likely just chops around and does nothing, goes nowhere.
• 1:58
  SPEAKER_00: Longer term, we still remain bullish CBOT corn.
• 2:02
  SPEAKER_00: As far as soybean news, this morning Argentina is back in question.
• 2:08
  SPEAKER_00: The government in Argentina is once again suggesting lower export taxes are coming for grains, maybe even as soon as January 1.
• 2:16
  SPEAKER_00: Contacts in Argentina tell us that farmers are once again becoming stubborn sellers of grain.
• 2:22
  SPEAKER_00: If they can hold off selling so that they uh can pay uh less taxes on grain that they sell, then eventually that slows down crush rates.
• 2:34
  SPEAKER_00: So, once again, this begs the question: does this slow down Argentina meal exports?
• 2:42
  SPEAKER_00: I don't know, but I would certainly lean in that direction.
• 2:45
  SPEAKER_00: So if meal exports are already slowing down in Brazil, and now we question Argentina crush rates, that certainly points towards U.S.
• 2:53
  SPEAKER_00: meal exports growing.
• 2:55
  SPEAKER_00: And that is bullish meal prices here in the U.S.
• 2:58
  SPEAKER_00: And it also keeps U.S.
• 3:00
  SPEAKER_00: crush margins big.
• 3:02
  SPEAKER_00: So big U.S.
• 3:04
  SPEAKER_00: crush margins are definitely not bearish.
• 3:07
  SPEAKER_00: And then we also have a long, long ways to go on this U.S.
• 3:10
  SPEAKER_00: crop, and let's not overlook the fact that China is in buying more and more U.S.
• 3:15
  SPEAKER_00: beans every day.
• 3:16
  SPEAKER_00: So net net CBOT soybeans should remain very well supported, at least until we get further down the road and we get more information on U.S.
• 3:26
  SPEAKER_00: crops and export demand for beans and meal.
• 3:29
  SPEAKER_00: On the bottom of page one, I've got a current map of soil moisture in the U.S., and you can see we've got a decently large area of the U.S.
• 3:38
  SPEAKER_00: grain growing area that is short soil moisture.
• 3:41
  SPEAKER_00: And then if we move on to page two, we see that we do have one isolated system coming through eastern Nebraska.
• 3:50
  SPEAKER_00: I mean, sorry, eastern South Dakota, eastern North Dakota into Minnesota the next several days.
• 3:56
  SPEAKER_00: This is gonna be their best chance of rain in multiple weeks.
• 4:00
  SPEAKER_00: Uh, and then we still have uh some just smoking hot temperatures today.
• 4:07
  SPEAKER_00: They kind of move further south the next two, three days and then come back middle of next week.
• 4:13
  SPEAKER_00: You can see uh I've got a chart for next Monday.
• 4:16
  SPEAKER_00: You've got highs well over 100 from Texas all the way up through South Dakota.
• 4:22
  SPEAKER_00: Uh so hot temperatures continue to punish those crops.
• 4:26
  SPEAKER_00: And then I've got two maps on the bottom of page two showing where that high pressure system is located today and then where it's going to be uh early next week.
• 4:36
  SPEAKER_00: That's it for today.
• 4:37
  SPEAKER_00: Thanks for listening.
• 4:38
  SPEAKER_00: We'll be back tomorrow.