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Transcript

Daily Market Podcast Oct 27 · 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 Tuesday morning, October 27th.
• 0:06
  SPEAKER_00: Walking in this morning, December corn is down one and a half at 453 and a half.
• 0:11
  SPEAKER_00: November soybeans are up eight and a quarter at 1249.5.
• 0:15
  SPEAKER_00: December meal is up 240 and December crude is down a dollar.
• 0:20
  SPEAKER_00: It's still a little bit above 100 bucks right now.
• 0:23
  SPEAKER_00: As far as corn news, yesterday CBOT corn was obviously following soybeans lower.
• 0:28
  SPEAKER_00: There was very little new news to drive the corn market on its own yesterday.
• 0:34
  SPEAKER_00: It is getting harder and harder to find bullish information for the corn market.
• 0:39
  SPEAKER_00: Crop estimates in Argentina continue to be big.
• 0:43
  SPEAKER_00: Excuse me.
• 0:44
  SPEAKER_00: The U.S.
• 0:44
  SPEAKER_00: Addishey and Buenos Aires raised their corn crop estimate all the way to 62 million tons for Argentina.
• 0:54
  SPEAKER_00: This is quite a bit larger than USDA's latest 55 million ton estimate.
• 1:00
  SPEAKER_00: Argentina corn remains the cheapest in the world, and if they grow that kind of crop, it likely will be the cheapest in the world for many months to come.
• 1:09
  SPEAKER_00: And therefore they dominate the exports.
• 1:12
  SPEAKER_00: U.S.
• 1:13
  SPEAKER_00: corn harvest jumped 16% last week to 60% complete.
• 1:18
  SPEAKER_00: This is still a few days behind average.
• 1:21
  SPEAKER_00: Weekly U.S.
• 1:22
  SPEAKER_00: corn exports continue to be disappointing.
• 1:24
  SPEAKER_00: Last week we shipped 25 million tons of corn versus 49 million tons of corn a year ago.
• 1:31
  SPEAKER_00: Each week we are simply falling further and further behind, both on corn export sales and shipments.
• 1:38
  SPEAKER_00: U.S.
• 1:39
  SPEAKER_00: corn exports are just not impressive at all and likely won't be for a while.
• 1:45
  SPEAKER_00: So the path to least resistance continues to be lower for corn, but after this big break that we've seen in the last several weeks, end-user buying will be under the market every day.
• 1:57
  SPEAKER_00: So we likely go lower at a very slow pace.
• 2:01
  SPEAKER_00: As far as soybean news, um, CBOT soybeans were down hard yesterday on the massive 8% break in the Brazilian currency.
• 2:10
  SPEAKER_00: Farmers in interior Brazil saw soybean prices yesterday in Brazilian reales that they had not seen since 2023.
• 2:20
  SPEAKER_00: This led to a very large day of farmers selling in Brazil and therefore the selling pressure for the border trade.
• 2:27
  SPEAKER_00: Brazilian soybean planting is now 43% complete, tying the fastest pace on record.
• 2:34
  SPEAKER_00: But there is one state that has fallen a little bit behind.
• 2:38
  SPEAKER_00: That's Paraná.
• 2:39
  SPEAKER_00: We've talked about this.
• 2:41
  SPEAKER_00: That's due to the excessive rains that they've had there for the last couple of weeks.
• 2:45
  SPEAKER_00: But I have a chart on the bottom of page one that shows total Brazilian planting and also Paranat planting.
• 2:53
  SPEAKER_00: As you can see, Paraná is just barely behind the five-year average.
• 2:58
  SPEAKER_00: So this is not nearly as big a deal as I feared it would be.
• 3:03
  SPEAKER_00: Clearly, farmers have been planting between the rain showers.
• 3:06
  SPEAKER_00: As far as U.S.
• 3:07
  SPEAKER_00: goes, harvest reached 79% versus 77% on average.
• 3:13
  SPEAKER_00: U.S.
• 3:13
  SPEAKER_00: weekly soybean exports are largely China fulfilling their trade agreement.
• 3:19
  SPEAKER_00: U.S.
• 3:19
  SPEAKER_00: soybean exports to other destinations are very small.
• 3:23
  SPEAKER_00: Crush margins remain very big in the U.S., well over$2 a bushel.
• 3:28
  SPEAKER_00: Like corn, there's very little news that's bullish for the soybean market.
• 3:34
  SPEAKER_00: But with such strong crush margins, it becomes hard to really break CBFT soybeans very much.
• 3:40
  SPEAKER_00: Going forward, for beans to break, we need meal prices to head back toward summertime lows.
• 3:47
  SPEAKER_00: That'd be some$30 lower.
• 3:49
  SPEAKER_00: That would back off of crush margins.
• 3:52
  SPEAKER_00: Therefore, beans are able to break some.
• 3:55
  SPEAKER_00: In the next several months, the market will be watching, we'll be closely watching South American weather.
• 4:00
  SPEAKER_00: We're all assuming record large crops down there.
• 4:03
  SPEAKER_00: So anything that takes away from that, which would mainly be hot, dry weather, and the market will start paying attention quickly.
• 4:11
  SPEAKER_00: As far as weather in the U.S., um we've got some light-scattered showers, particularly in the Western Corn Belt this week, and it moves into the eastern corn belt next week.
• 4:21
  SPEAKER_00: So maybe that slows down the tail end of harvest a little bit.
• 4:27
  SPEAKER_00: But temperatures remain well above normal across the entire country for the foreseeable future for the next couple of weeks.
• 4:34
  SPEAKER_00: As far as Brazil goes, um, in the one to five day forecast, it looks like Paraná is only going to get an inch at most.
• 4:42
  SPEAKER_00: So rainfall amounts have really backed off in the near term.
• 4:46
  SPEAKER_00: Looks like they are getting back into rains next week.
• 4:50
  SPEAKER_00: But um again, plenty pace is not nearly as far behind as I feared it would be in Paranas.
• 4:56
  SPEAKER_00: So really not that big of a deal.
• 4:58
  SPEAKER_00: That's it for today.
• 4:59
  SPEAKER_00: Thanks for listening.
• 5:00
  SPEAKER_00: We'll be back tomorrow.