Latest / M6 Capital Daily Market Podcast / Daily Market Podcast Sep 15

Transcript

Daily Market Podcast Sep 15 · 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.
• 0:05
  SPEAKER_00: On Tuesday morning, September 15th, walking in this morning, December corn is down 5 cents at 528.25.
• 0:13
  SPEAKER_00: November soybeans is down 8.3 quarters at 1295 and a half.
• 0:18
  SPEAKER_00: December meal is down 290 at 353.30.
• 0:22
  SPEAKER_00: And October crude oil is up 80 cents at 102.30 this morning.
• 0:26
  SPEAKER_00: As far as corn news, in USTA's weekly crop progress report yesterday, the U.S.
• 0:33
  SPEAKER_00: corn crop ratings increased, condition crop ratings increased one point from 56% rated good to excellent to 57%.
• 0:42
  SPEAKER_00: And 80% of the of the U.S.
• 0:44
  SPEAKER_00: corn crop is dented, 42% is mature, and 8% of the crop is harvested.
• 0:50
  SPEAKER_00: So the corn crop is pretty much done.
• 0:53
  SPEAKER_00: The far northern and eastern corn belt states are a little bit behind the others, but for the rest of the nation, the corn growing season is basically done.
• 1:03
  SPEAKER_00: It's over with.
• 1:04
  SPEAKER_00: As for the U.S.
• 1:05
  SPEAKER_00: export pace, last week's corn exports continue to be very large, and two-thirds of the corn export flows are coming down the Mississippi River and going out the Gulf.
• 1:16
  SPEAKER_00: In recent weeks, we have discussed the potential low water in the Mississippi River.
• 1:20
  SPEAKER_00: Levels have actually rebounded a little bit and are okay for now.
• 1:24
  SPEAKER_00: I've got a chart on the bottom of page two if you want to take a look at this.
• 1:29
  SPEAKER_00: And upcoming weather forecast should keep the river at decent water levels for now.
• 1:35
  SPEAKER_00: There is much discussion in the last 24 hours, or actually the last several days, about Russian Ukraine.
• 1:42
  SPEAKER_00: And yesterday, Ukraine supposedly agreed to stop targeting Russian energy infrastructure.
• 1:52
  SPEAKER_00: But recent history shows tells us that we just can't have very much faith in statements from Ukrainian or Russian officials.
• 2:01
  SPEAKER_00: So for now, we have to continue to lean towards very limited grain export flows out of Russia or Ukraine.
• 2:10
  SPEAKER_00: And why do we care?
• 2:12
  SPEAKER_00: Well, that keeps U.S.
• 2:14
  SPEAKER_00: corn exports at a pretty big pace, at least for now.
• 2:18
  SPEAKER_00: As for CBOT corn, we remain that uh we continue to be longer term bullish, just not right here, right now.
• 2:27
  SPEAKER_00: Not with a record spec long and harvest right in our face.
• 2:31
  SPEAKER_00: And we still believe that breaks over the next several weeks are to be bought.
• 2:37
  SPEAKER_00: Longer term, we're still bullish.
• 2:39
  SPEAKER_00: As far as soybeans go, U.S.
• 2:42
  SPEAKER_00: crop condition rating yesterday for soybeans was unchanged at 58%.
• 2:47
  SPEAKER_00: Ready to go to excellent.
• 2:48
  SPEAKER_00: As you can see in the in the chart on the bottom uh of page one, that is right at the average the last 20 years.
• 2:56
  SPEAKER_00: 44% of the U.S.
• 2:57
  SPEAKER_00: soybean crop is dropping leaves, and harvest is 6% complete in the U.S.
• 3:03
  SPEAKER_00: Weather can still help beans in the central corn belt and areas to the north of that.
• 3:10
  SPEAKER_00: The weather forecast calls for decent decent rains this week and then normal to below normal precip after that.
• 3:17
  SPEAKER_00: So with a normalish crop rating and okay to slightly dry precip, it becomes hard for the market to cut USDA's recent U.S.
• 3:29
  SPEAKER_00: soybean yield.
• 3:30
  SPEAKER_00: So for now, the market's gonna have to settle on the fact that we have a record U.S.
• 3:35
  SPEAKER_00: bean crop.
• 3:37
  SPEAKER_00: Planting should be beginning in Brazil, and there are some reports of some isolated planting in the state of Paraná.
• 3:46
  SPEAKER_00: But planting in the biggest state of Mato Grosso has yet to begin.
• 3:51
  SPEAKER_00: Legally, uh, they can begin planting today, but farmers will wait on seasonal rains.
• 3:59
  SPEAKER_00: The forecast for central Brazil, including Mato Grosso, is super dry for the next two weeks.
• 4:06
  SPEAKER_00: So it looks like planting season in Brazil will begin a little late.
• 4:10
  SPEAKER_00: Not a huge deal, at least not yet.
• 4:14
  SPEAKER_00: Light corn, but it's it is something that we've got to keep an eye on.
• 4:18
  SPEAKER_00: Light corn, this record speckling in CBOT soybeans and okay weather and harvest beginning, it seems the path of least resistance in the near term will be lower.
• 4:32
  SPEAKER_00: Longer term direction of soybeans will depend much on the South American crop prospects and U.S.
• 4:39
  SPEAKER_00: export flows to China.
• 4:41
  SPEAKER_00: And today we know very little about either one of those.
• 4:46
  SPEAKER_00: As far as weather goes, we've got a decent rain coming across Iowa, Minnesota, Wisconsin, northern parts of Illinois and Michigan the next several days.
• 4:58
  SPEAKER_00: Then we've got um okay rains in the eastern corn belt and maybe uh kind of light scattered everywhere else next week.
• 5:08
  SPEAKER_00: Um the 6-10 and 8 to 14 day have normal precip over the entire corn belt with the really over the whole country, with the exception of maybe Minnesota, Wisconsin, parts of Michigan.
• 5:27
  SPEAKER_00: I've got a chart on the bottom of page two showing uh the Mississippi River at Cruthersville, Missouri.
• 5:34
  SPEAKER_00: I picked Cruthersville because it is downriver of Cairo, where the Ohio River flows into the Mississippi.
• 5:41
  SPEAKER_00: Therefore, you can see the full flow of the Mississippi.
• 5:44
  SPEAKER_00: And we're gonna be a little bit below normal, uh, several feet below normal, but we have even been below this multiple times in the last uh six, seven, eight years.
• 5:57
  SPEAKER_00: So we're not low enough for export flows, grain export flows to slow down.
• 6:04
  SPEAKER_00: Um and we should stay okay given the the rainfall forecast coming up.
• 6:10
  SPEAKER_00: That's it for today.
• 6:12
  SPEAKER_00: Thanks for listening.
• 6:13
  SPEAKER_00: We'll be back tomorrow.