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Daily Market Podcast Sep 29 · 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, September 29th.
• 0:07
  SPEAKER_00: Walking in this morning, December corn is up a penny at 524.
• 0:11
  SPEAKER_00: November soybeans are up two and a half at 1293 quarters.
• 0:15
  SPEAKER_00: December meal is down 170 and crude is down 80 cents.
• 0:21
  SPEAKER_00: Excuse me.
• 0:23
  SPEAKER_00: Let's talk about U.S.
• 0:25
  SPEAKER_00: and China a little bit more.
• 0:26
  SPEAKER_00: So the end result of the U.S.
• 0:29
  SPEAKER_00: and China meetings last week was that both countries agreed to extend the tariff truce that was set to expire on November 10th.
• 0:39
  SPEAKER_00: They extended that for another two months.
• 0:41
  SPEAKER_00: It now expires January 10th.
• 0:44
  SPEAKER_00: And during that extended time period, China agrees to continue exporting rare earth minerals.
• 0:50
  SPEAKER_00: Also, the U.S.
• 0:51
  SPEAKER_00: acknowledged that China has bought$4 billion worth of U.S.
• 0:56
  SPEAKER_00: ag goods in calendar year 2026 so far.
• 1:01
  SPEAKER_00: That number excludes soybeans.
• 1:03
  SPEAKER_00: So it's ag goods minus soybeans.
• 1:05
  SPEAKER_00: $4 billion.
• 1:07
  SPEAKER_00: And clearly that is not going to result in$17 billion by the end of the year.
• 1:13
  SPEAKER_00: We pointed that out.
• 1:15
  SPEAKER_00: The U.S.
• 1:16
  SPEAKER_00: officials pointed that out, but China made no promises to pick up the pace at all.
• 1:21
  SPEAKER_00: China did, however, lower the import tariff on U.S.
• 1:25
  SPEAKER_00: grains to 1%.
• 1:28
  SPEAKER_00: And that's mainly going to affect corn, soybeans, grain sorghum.
• 1:34
  SPEAKER_00: The import tariff on U.S.
• 1:35
  SPEAKER_00: soybeans was kept at 10%.
• 1:38
  SPEAKER_00: To me, this was absolutely a worthless move, meaningless.
• 1:43
  SPEAKER_00: For commercial operations to in China to import U.S.
• 1:46
  SPEAKER_00: grains, they first have to get approval from the Chinese government to let them do it.
• 1:52
  SPEAKER_00: So again, meaningless.
• 1:56
  SPEAKER_00: Well, you if you look today, the U.S.
• 1:59
  SPEAKER_00: corn and wheat are both the most expensive in the world, especially when you calculate landed values in China.
• 2:07
  SPEAKER_00: So the summary here is it looks like Trump and Z punted the ball down the field and made absolutely no new progress at all.
• 2:17
  SPEAKER_00: In other words, the meeting was worthless, the market was looking for something, and they got nothing.
• 2:23
  SPEAKER_00: And Trump's statement last Thursday that farmers is a very vague statement that farmers would be very happy.
• 2:31
  SPEAKER_00: That statement looks like just yet another politician making some empty statement that was meaningless.
• 2:37
  SPEAKER_00: As far as corn goes, um the CBFT corn market Sunday night and into yesterday began to realize that these meetings with China resulted in a big whopping nothing.
• 2:49
  SPEAKER_00: Meanwhile, and therefore they sold off pretty hard yesterday.
• 2:52
  SPEAKER_00: Meanwhile, the U.S.
• 2:53
  SPEAKER_00: corn export pace also seems to be slowing down.
• 2:58
  SPEAKER_00: Corn exports US uh from the U.S.
• 3:00
  SPEAKER_00: last week were down quite a bit from the press uh previous several weeks.
• 3:05
  SPEAKER_00: And U.S.
• 3:06
  SPEAKER_00: corn prices are so high.
• 3:08
  SPEAKER_00: And if you calculate the freight advantage out of South America, U.S.
• 3:12
  SPEAKER_00: corn is not competitive into most major markets in the world.
• 3:17
  SPEAKER_00: Uh, and that would be mainly North Africa and Asia.
• 3:21
  SPEAKER_00: That is not good for corn export uh prospects out of the U.S.
• 3:26
  SPEAKER_00: Also, Brazil corn planning progress is ahead of average.
• 3:29
  SPEAKER_00: Uh, corn area is expected to be a little bit smaller in Brazil this year.
• 3:34
  SPEAKER_00: I've got a chart of their plan progress on the bottom of page one.
• 3:38
  SPEAKER_00: So now it looks like the corn market waits on this uh USDA September 1 grain stocks report out tomorrow morning at 11 a.m.
• 3:45
  SPEAKER_00: We like corn market likely does nothing today.
• 3:49
  SPEAKER_00: And as we stated yesterday, the market needs a somewhat bullish report from USDA tomorrow.
• 3:57
  SPEAKER_00: Otherwise, we could easily see a sell-off with the speculators exiting their massive long positions.
• 4:04
  SPEAKER_00: As far as soybean news, um, after big whopping nothing from China last week, the country of China is now on a mid-autumn holiday this week, and that rolls into the Golden Week holiday from October 1 through 7.
• 4:22
  SPEAKER_00: So historically during national holidays, we seldom see China buying much soybean for import.
• 4:30
  SPEAKER_00: Seems like they're they just shut down totally for here for a week and a half.
• 4:36
  SPEAKER_00: So if the market is wanting to see China buying more soybeans following their meetings in Washington, that is very unlikely this week or next.
• 4:45
  SPEAKER_00: Meanwhile, soy planning in Brazil is 4% complete, which is right on a normal pace.
• 4:51
  SPEAKER_00: I still contend that it's gonna be hard for CBOT soybeans to hold up at these high levels.
• 4:56
  SPEAKER_00: There was no bullish news from China, and weather and planning progress seems okay in South America.
• 5:02
  SPEAKER_00: Today it's pretty hard to find bullish news for soybeans.
• 5:08
  SPEAKER_00: Um, let's uh talk about weather here for a minute.
• 5:12
  SPEAKER_00: Um the main feature in the U.S.
• 5:15
  SPEAKER_00: is going to be this hurricane polo that made landfall on the Baja Peninsula off the west coast of Mexico early this morning.
• 5:25
  SPEAKER_00: And it looks like the models expect it to diminish pretty quickly.
• 5:29
  SPEAKER_00: Uh, and by the time it hits the New Mexico, Texas border area, it's only supposed to be a tropical depression.
• 5:37
  SPEAKER_00: Now, I will say, weather models historically do a very bad job in forecasting the direction of these things once they make landfall.
• 5:46
  SPEAKER_00: Right now, the weather models have it producing rains across uh a pretty broad area in New Mexico, Texas, Oklahoma, and Kansas today through Thursday.
• 5:58
  SPEAKER_00: And then that whole line of rain shifts east over the weekend.
• 6:03
  SPEAKER_00: Uh, but again, these models historically just do not do a good job of forecasting these things once to make landfall.
• 6:11
  SPEAKER_00: So that's kind of anybody's guess.
• 6:14
  SPEAKER_00: Uh, and then uh I don't have any weather maps in this morning for South America, but it looks like uh central Brazil and um the central grain area of Argentina are both expected to get better rains.
• 6:28
  SPEAKER_00: So weather is okay today in South America.
• 6:31
  SPEAKER_00: That's it for today.
• 6:32
  SPEAKER_00: Thanks for listening.
• 6:32
  SPEAKER_00: We'll be back tomorrow.