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Daily Market Podcast Sep 24 · 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 Thursday morning, September 24th.
• 0:07
  SPEAKER_00: Walking in this morning, December corn is down a penny at 5.28 and a quarter.
• 0:11
  SPEAKER_00: November beans are up six at$13.24.
• 0:15
  SPEAKER_00: December meal is back up in new contract highs this morning, up$4 at$374.60.
• 0:22
  SPEAKER_00: And November Crude is back higher as$1.60 higher this morning at$93.70.
• 0:27
  SPEAKER_00: As far as corn news this morning, um, CBOT corn market is now sitting at the exact same price it was trading last Friday.
• 0:35
  SPEAKER_00: The entire 15 cent rally that we had on Monday on optimism for a US-China trade deal has completely been erased.
• 0:44
  SPEAKER_00: President Trump and Chinese President Xi Jinping are scheduled to meet all day today and into uh tomorrow morning.
• 0:54
  SPEAKER_00: Hopefully, we know more after these meetings, but the market is very hopeful that these meetings end with China buying you more U.S.
• 1:02
  SPEAKER_00: corn.
• 1:04
  SPEAKER_00: If not, we could easily see CBFT corn futures collapse.
• 1:09
  SPEAKER_00: Harvest is picking up after rain delays.
• 1:12
  SPEAKER_00: Most of the central corn belt is free of rain for the next eight to nine days.
• 1:16
  SPEAKER_00: Central Iowa and West remains a little wet.
• 1:19
  SPEAKER_00: Meanwhile, the corn crop in Europe continues to get smaller.
• 1:23
  SPEAKER_00: That prolonged dryness and heat really, really hurt their corn crop this summer.
• 1:29
  SPEAKER_00: We've also mentioned in recent days that the U.S.
• 1:32
  SPEAKER_00: corn price was the highest in the world, and that eventually means less corn exports from the U.S.
• 1:38
  SPEAKER_00: Well, as of this morning, Brazil and U.S.
• 1:41
  SPEAKER_00: corn prices are back to even money.
• 1:44
  SPEAKER_00: I've got a price chart on uh for corn and soybean prices, export prices on the bottom of page one.
• 1:51
  SPEAKER_00: Uh take a look at those.
• 1:53
  SPEAKER_00: And you can see in that chart that uh uh Argentina remains the cheapest and they're doing a lot of business, but U.S.
• 2:01
  SPEAKER_00: and Brazil are even priced.
• 2:03
  SPEAKER_00: So U.S.
• 2:05
  SPEAKER_00: export demand may not be backing off just yet.
• 2:09
  SPEAKER_00: Back to CBOT corn, we could be very volatile the next one or two days as news comes out of the results of these Chinese meetings.
• 2:19
  SPEAKER_00: So be careful.
• 2:21
  SPEAKER_00: As far as soybeans uh go, there's much talk that these continued rains in the eastern part of Nebraska and central and western Iowa are causing swimming crop issues and specifically pod splitting and some reports of mold showing up.
• 2:37
  SPEAKER_00: That area has been wet for weeks and weeks and looks to remain wet for at least the next 10 days.
• 2:44
  SPEAKER_00: Is this enough to really impact U.S.
• 2:47
  SPEAKER_00: total production?
• 2:48
  SPEAKER_00: Doubtful.
• 2:49
  SPEAKER_00: But if you're a farmer in this area, it's a big deal.
• 2:53
  SPEAKER_00: Um, it's also a big deal if you're a crush in that area.
• 2:56
  SPEAKER_00: These harvest delays are keeping the slow bean crush rate slow and therefore keeping meal prices firm.
• 3:02
  SPEAKER_00: Dieser meal is back at new contract highs this morning.
• 3:06
  SPEAKER_00: As for bean oil, there are reports that sunflower seed oil exports out of Ukraine have dramatically slowed down with all these Black Sea issues.
• 3:16
  SPEAKER_00: And then we got crude oil bouncing around with the latest news on Iran.
• 3:20
  SPEAKER_00: And then diesel prices could be impacted by Trump's proposed 90-day suspension on U.S.
• 3:27
  SPEAKER_00: diesel exports.
• 3:28
  SPEAKER_00: That's not in effect yet, but the White House says they're considering it.
• 3:33
  SPEAKER_00: So soybean oil seems to be much more driven by political mess than anything else right now.
• 3:39
  SPEAKER_00: And then the soybean market is waiting on news from these trade talks with the Chinese.
• 3:45
  SPEAKER_00: I am increasingly in the camp that CBFT soybeans are high enough for now.
• 3:51
  SPEAKER_00: But for this market to go higher, we need some either some new demand showing up from China or some major crop issue in South America.
• 4:00
  SPEAKER_00: And right now, we have neither of those.
• 4:07
  SPEAKER_00: I have a chart of soybean export prices.
• 4:09
  SPEAKER_00: And you can see that Brazilian prices for January just fall off a cliff.
• 4:16
  SPEAKER_00: That's because you've got new crop harvest.
• 4:19
  SPEAKER_00: So here we are sitting in late September.
• 4:23
  SPEAKER_00: At some point in the next couple of months, the world stops buying U.S.
• 4:27
  SPEAKER_00: and Argentina beans and waits on these grossly cheaper beans coming out of Brazil in January.
• 4:34
  SPEAKER_00: So again, a lot of this depends on crop progress, if the crops were planted on time and whatnot.
• 4:41
  SPEAKER_00: So uh we need to keep our eye on Brazil.
• 4:45
  SPEAKER_00: All right, moving on to weather.
• 4:47
  SPEAKER_00: Again, central western Iowa into uh parts of Nebraska stays wet um really for the next 10 days.
• 4:58
  SPEAKER_00: Um most of the most of Illinois uh and east is open for the next at least the next seven, eight days, maybe nine days.
• 5:09
  SPEAKER_00: So that's where the bulk of harvest is gonna be occurring.
• 5:13
  SPEAKER_00: And I've for the I don't know, fourth, fifth day in the road, we've got a map of South America precip.
• 5:20
  SPEAKER_00: This is something we really, really need to be watching, particularly in Brazil.
• 5:24
  SPEAKER_00: And it does look like um early to middle part of next week, some seasonal rains start to show up in central Brazil, mainly Mato Grosso area.
• 5:36
  SPEAKER_00: So as long as that occurs, the world is fine.
• 5:40
  SPEAKER_00: Uh, if we get to early next week and those rains have backed off, then the market's going to start paying a lot more uh attention to that.
• 5:49
  SPEAKER_00: That's it for today.
• 5:50
  SPEAKER_00: Thanks for listening.
• 5:51
  SPEAKER_00: We'll be back tomorrow.