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Transcript

Daily Market Podcast Aug 11 · M6 Capital Daily Market Podcast

• 0:00
  SPEAKER_00: Good morning.
• 0:00
  SPEAKER_00: This is Chris Myers of AM6 Capital Management with our daily market letter on Tuesday morning, August 11th.
• 0:06
  SPEAKER_00: Walking in this morning, December corn is down three quarters of a cent at 461.
• 0:10
  SPEAKER_00: November soybeans are down two and a quarter at 11.77 and a quarter.
• 0:14
  SPEAKER_00: December meal is down a dollar at 310.60.
• 0:18
  SPEAKER_00: And September crude is unchanged at 82.20 this morning.
• 0:22
  SPEAKER_00: As far as corn news, uh the COP CBOT corn market is clearly just passing time, waiting for the big USDA crop production report tomorrow.
• 0:31
  SPEAKER_00: Meanwhile, if you look at yesterday's uh weekly crop progress report out of USDA, the U.S.
• 0:39
  SPEAKER_00: corn condition rating was unchanged at 61% rated good to excellent.
• 0:44
  SPEAKER_00: Also, 61% of the U.S.
• 0:46
  SPEAKER_00: corn crop is in the dough phase and 16% is dented.
• 0:50
  SPEAKER_00: Corn harvest is underway in several southern states.
• 0:53
  SPEAKER_00: Current corn condition ratings for this week point to a U.S.
• 0:57
  SPEAKER_00: corn yield of 181 to 182, okay, versus USDA's current 183 bushel per year, I mean bushel per acre yield.
• 1:09
  SPEAKER_00: The average market guess for tomorrow's crop report is 182.7.
• 1:15
  SPEAKER_00: So everything's kind of falling in line, something uh close to USDA's 183 yield or slightly below.
• 1:25
  SPEAKER_00: Okay.
• 1:26
  SPEAKER_00: Um weekly U.S.
• 1:28
  SPEAKER_00: corn exports continue to be very big, with a very large portion of those flowing down the Mississippi River through the Gulf.
• 1:35
  SPEAKER_00: So again, we need to continue watching the river levels.
• 1:39
  SPEAKER_00: Global corn demand remains massive.
• 1:41
  SPEAKER_00: And right now it still appears that it's U.S.
• 1:44
  SPEAKER_00: and Argentina uh doing the bulk of that business.
• 1:47
  SPEAKER_00: Exports from Brazil are below normal so far, partly due to a smaller crop than expected, and partly due to huge ethanol demand for corn in Brazil.
• 1:58
  SPEAKER_00: Ukraine and Russia are basically out for now.
• 2:00
  SPEAKER_00: We've already discussed that, and they may be out for a while.
• 2:03
  SPEAKER_00: As we've stated before, the CBOT corn market will get a reset tomorrow morning at 11 a.m.
• 2:09
  SPEAKER_00: Central Time with USDA's crop production report.
• 2:12
  SPEAKER_00: Until then, corn futures probably don't do a whole lot.
• 2:16
  SPEAKER_00: Longer term, I remain in the camp that the huge U.S.
• 2:20
  SPEAKER_00: export demand will be supportive of corn prices and any hiccup in corn supplies and prices head higher.
• 2:28
  SPEAKER_00: But first, we need to get past this big USDA report tomorrow and make sure that USDA does not throw us a curveball.
• 2:35
  SPEAKER_00: As far as soybean news, the weekly crop progress report showed U.S.
• 2:39
  SPEAKER_00: soybean condition ratings declined one point from 63% rate of good to excellent to 62% rated good to excellent.
• 2:48
  SPEAKER_00: This is right at the 20-year average crop rating.
• 2:51
  SPEAKER_00: 74% of the U.S.
• 2:53
  SPEAKER_00: soybean crop is setting pods, so that leaves 26% that is still blooming and not setting pods yet.
• 3:02
  SPEAKER_00: The point being that this bean crop still has a long, long ways to go in its growing season.
• 3:08
  SPEAKER_00: Like corn, soybean market is waiting for USDA's crop production report tomorrow.
• 3:14
  SPEAKER_00: And as a result, trading volume uh in CB2 soybeans yesterday was half of a normal day.
• 3:22
  SPEAKER_00: And looking back, it's the lowest volume day in many, many months.
• 3:28
  SPEAKER_00: Crop production rate or sorry, crop condition ratings imply a U.S.
• 3:32
  SPEAKER_00: soybean yield at or slightly above USDA's current 53 bushel per acre yield.
• 3:38
  SPEAKER_00: The average market gas is also 53 bushels an acre.
• 3:42
  SPEAKER_00: So, somewhat like corn, the market's really not looking for much of a change in USDA's yield tomorrow.
• 3:49
  SPEAKER_00: Shifting to Iran, there are stories this morning that a U.S.
• 3:53
  SPEAKER_00: Iran deal is getting closer.
• 3:55
  SPEAKER_00: We've been down this road before, so who knows if this is true or not?
• 3:58
  SPEAKER_00: But those headlines have broken crude this morning, and that also broke bean oil back.
• 4:04
  SPEAKER_00: I still have the opinion that CBOT soybeans remain well supported, at least for the next month or so until we get further down the road and we see how this U.S.
• 4:14
  SPEAKER_00: crop is treated later in this growing season.
• 4:18
  SPEAKER_00: But like corn, we need to get past this USDA report tomorrow and see what it tells us.
• 4:23
  SPEAKER_00: Hopefully we're smarter.
• 4:25
  SPEAKER_00: Um on the bottom of page one today, I've got charts, uh historical charts of U.S.
• 4:30
  SPEAKER_00: corn crop rating and swimming crop rating.
• 4:33
  SPEAKER_00: And you know, both of them are pretty close to the 20-year average.
• 4:37
  SPEAKER_00: As far as weather goes, we've got this system coming across Iowa, Illinois, Indiana, Ohio, um, into parts of Kentucky to uh the next several days.
• 4:47
  SPEAKER_00: And then next week, um it's uh precip is mostly light next week.
• 4:53
  SPEAKER_00: And to be honest with you, we could uh we could do with less heat and more rain, uh particularly in the Corn Belt and Western areas.
• 5:02
  SPEAKER_00: We still got some smoking hot temperatures next several days in the plain states, um, mainly centered around Kansas.
• 5:09
  SPEAKER_00: You've got several days of 100 plus, and even tomorrow, you've got some uh an area of central Kansas that's over 110.
• 5:17
  SPEAKER_00: So uh I've got some charts or actually maps on the bottom of page two looking further out uh in the 8 to 14 day time period.
• 5:27
  SPEAKER_00: And again, you still got warm temperatures and the mid south and up into parts of Missouri, still getting below normal precip.
• 5:37
  SPEAKER_00: Uh, a big portion of the central part of the country really could use more precip than what we've been getting lately.
• 5:43
  SPEAKER_00: So that's it for today.
• 5:45
  SPEAKER_00: Uh, we'll be back tomorrow morning.
• 5:47
  SPEAKER_00: Have a good day.