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Transcript

Daily Market Podcast Sep 1 · 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 Tuesday morning, uh September 1st.
• 0:08
  SPEAKER_00: Walking in this morning, December corn is down two and three quarters at 534 and three quarters.
• 0:13
  SPEAKER_00: November soybeans are up nine at twelve ninety-seven.
• 0:16
  SPEAKER_00: December meal is down 70 cents at 344.60.
• 0:20
  SPEAKER_00: October crude is up$2 at 87.80.
• 0:24
  SPEAKER_00: So, first thing this morning we need to talk about the G20 summit.
• 0:28
  SPEAKER_00: This week, Treasury Secretary Bissent is meeting with other Treasury Secretaries or the like at the G20 summit in Asheville, North Carolina.
• 0:38
  SPEAKER_00: First, he has to convince every nation that increasing U.S.
• 0:43
  SPEAKER_00: tariffs on their goods is an okay thing to do.
• 0:46
  SPEAKER_00: Then he has to ask all of them to go along with Trump's economic sanctions and trade ban on Iran.
• 0:53
  SPEAKER_00: All the while, U.S.
• 0:55
  SPEAKER_00: debt is skyrocketing and our bond rates are rising, and our ability to repay those debts is hugely in question.
• 1:01
  SPEAKER_00: The biggest ask will be from China.
• 1:03
  SPEAKER_00: The biggest question will be: does China push back?
• 1:08
  SPEAKER_00: China has officials also at a private summit right now with Iran, Russia, and India.
• 1:16
  SPEAKER_00: So if China pushes back against U.S.
• 1:20
  SPEAKER_00: request here, then that has huge implications towards U.S.
• 1:25
  SPEAKER_00: ag trade with China.
• 1:28
  SPEAKER_00: And also the meeting to occur later this month at the White House.
• 1:33
  SPEAKER_00: So this really could be an interesting week, particularly relating to China.
• 1:37
  SPEAKER_00: As far as corn news, in USDA's weekly crop progress report yesterday, uh the U.S.
• 1:43
  SPEAKER_00: corn condition rating was unchanged at 57%, a rate of good to excellent.
• 1:49
  SPEAKER_00: 62% of the U.S.
• 1:50
  SPEAKER_00: crop was dented, and 92% of the crop is in a dose stage.
• 1:54
  SPEAKER_00: Both are several days ahead of average.
• 1:57
  SPEAKER_00: As for the U.S.
• 1:58
  SPEAKER_00: crop, there are still various crop tours uh going across the U.S.
• 2:02
  SPEAKER_00: Corn Belt, and most crop estimates are coming in around the 175 to 177 bushel per acre range.
• 2:11
  SPEAKER_00: That is a big drop from what USDA uh estimated in August.
• 2:16
  SPEAKER_00: So the big question now is this will USDA lower the crop this much in September?
• 2:23
  SPEAKER_00: History tells us probably not.
• 2:25
  SPEAKER_00: Um, they typically make small incremental declines month after month.
• 2:31
  SPEAKER_00: So this makes next week's USDA crop report crop production report a very important market factor.
• 2:39
  SPEAKER_00: Meanwhile, the corn crop in Europe continues to slide downhill.
• 2:43
  SPEAKER_00: Crop conditions in France are now the lowest ever reported.
• 2:47
  SPEAKER_00: I've got a chart uh on the bottom of page one to take a look at.
• 2:51
  SPEAKER_00: Um, also, this ultimately means that uh there will be a lot more corn imports going into Europe.
• 3:00
  SPEAKER_00: I remain in the camp that CBOT corn has rallied plenty enough for now, with the bulk of harvest still ahead of us and this USDA report next week.
• 3:09
  SPEAKER_00: I think the market will buy time and trade mostly sideways for now, lacking direction.
• 3:15
  SPEAKER_00: I remain longer term very, very bullish.
• 3:18
  SPEAKER_00: I just don't think the market can go up a whole lot more right here, right now.
• 3:22
  SPEAKER_00: As far as beans go, um, USDA lowered the U.S.
• 3:26
  SPEAKER_00: soybean crop condition ratings two points yesterday from 60% rate of good to excellent to 58%.
• 3:34
  SPEAKER_00: And most of the decline was in the drier states.
• 3:37
  SPEAKER_00: There are many in the marketplace, including myself, questioning the weather now, um, the weather forecast now that we are at the tail end of the growing season.
• 3:47
  SPEAKER_00: We need more rain, and that just ain't in the forecast.
• 3:51
  SPEAKER_00: This is supportive to CBOT swimming futures.
• 3:54
  SPEAKER_00: Also, after the close yesterday, EPA announced EPA announced their decision on waivers for small refiners.
• 4:03
  SPEAKER_00: It's a long drawn-out process here, but let me try to sum it up.
• 4:09
  SPEAKER_00: Basically, they are allowing a lot of small refiners to waive their requirements on using biofuels.
• 4:18
  SPEAKER_00: But at the same time, EPA is reassigning most of that lost biofuel demand back to larger refiners.
• 4:26
  SPEAKER_00: So, net net, this means that biofuel demand remains big.
• 4:31
  SPEAKER_00: Uh, and that's bullish for bean oil futures this morning.
• 4:34
  SPEAKER_00: Bean oil futures are up uh, you know, 130 this morning.
• 4:39
  SPEAKER_00: With this dry weather forecast and the market ideas uh that this U.S.
• 4:44
  SPEAKER_00: bean crop is likely to get smaller, along with this EPA announcement, Chicago soybeans are very well supported this morning.
• 4:54
  SPEAKER_00: But the market will watch China in these economic talks to see if anything meaningful comes out for U.S.
• 5:00
  SPEAKER_00: soybean export demand.
• 5:02
  SPEAKER_00: As far as let's move on to weather, as far as weather goes, um, kind of the same forecast as yesterday, some of the far northern cornbelt, uh, a little bit of Minnesota, but mainly Wisconsin over into Michigan gets some decent rains this week.
• 5:16
  SPEAKER_00: The rest of the country is light scattered or even no rain, and that kind of is the picture for next week, also.
• 5:22
  SPEAKER_00: And we have still got some smoking hot temperatures in the western uh corn belt.
• 5:29
  SPEAKER_00: Uh, and this is, you know, Kansas, Nebraska, Missouri, Iowa, into parts of Iowa.
• 5:37
  SPEAKER_00: Um, into parts of Illinois, and later in the week, even moving north up into Minnesota and South Dakota.
• 5:45
  SPEAKER_00: And this is upper 90s, hundreds, and even 105 degree temperatures.
• 5:50
  SPEAKER_00: So this is too much heat and not enough rain at the tail end of this growing season.
• 5:56
  SPEAKER_00: Uh, and this is really gonna affect soybeans uh more than it does for corn.
• 6:01
  SPEAKER_00: And then it looks like this warm weather stays in the forecast for the foreseeable future, uh, well on out into the uh into the two week time period.
• 6:11
  SPEAKER_00: So we need more rain in the corn belt and particularly the central and western corn belt, and we need to back off these high temperatures, and neither one of those looks to be taking place right now.
• 6:22
  SPEAKER_00: So that's it for today.
• 6:24
  SPEAKER_00: Thanks for listening.
• 6:25
  SPEAKER_00: We'll be back tomorrow.