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Transcript

Daily Market Podcast Aug 4 · 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 for Tuesday morning, August 4th.
• 0:05
  SPEAKER_00: Walking in this morning, December corn is down two and a half at 470.
• 0:09
  SPEAKER_00: November soybeans are down 10.5 at 1181.5.
• 0:13
  SPEAKER_00: December meal is down 320 at 318.40.
• 0:19
  SPEAKER_00: And crude September crude oil is down$2.50 at$77.80.
• 0:27
  SPEAKER_00: Excuse me.
• 0:28
  SPEAKER_00: For corn news this morning, uh, yesterday USDA's weekly crop progress report lowered the U.S.
• 0:35
  SPEAKER_00: corn condition rating two points from 63% rated good to excellent to 61%.
• 0:41
  SPEAKER_00: The biggest declines were in Kansas, Nebraska, North Dakota.
• 0:45
  SPEAKER_00: Overall, the U.S.
• 0:46
  SPEAKER_00: condition rating is slightly below average for early August.
• 0:51
  SPEAKER_00: As a general overview, the plain states and western areas are below average.
• 0:56
  SPEAKER_00: The central states are decent, and the far eastern states are bad.
• 1:01
  SPEAKER_00: I have a map on uh page three of the corn condition ratings where you can see uh who's good and who's not.
• 1:09
  SPEAKER_00: Net net, this type of crop condition rating uh for early August suggests a yield at or maybe slightly below USDA's current um U.S.
• 1:20
  SPEAKER_00: corn yield of 183 bushels per acre.
• 1:23
  SPEAKER_00: Remember, next week, uh next Wednesday on August 12th, USDA will issue its crop production report giving us new U.S.
• 1:30
  SPEAKER_00: grain production estimates.
• 1:32
  SPEAKER_00: Um meanwhile, U.S.
• 1:34
  SPEAKER_00: corn exports continue to be amazing.
• 1:37
  SPEAKER_00: Last week's U.S.
• 1:38
  SPEAKER_00: corn exports were a massive 74 million bushels.
• 1:42
  SPEAKER_00: That's over three times what we were doing last year of 23 million bushels a week.
• 1:49
  SPEAKER_00: As for weather, the central and eastern parts of the corn belt get okay rains in the next 10 days, but the rest of the corn producing areas are mostly dry, and temperatures remain above to some areas much above normal, especially in the plain states.
• 2:04
  SPEAKER_00: We continue to believe that CBOT corn will bounce around erratically for the next week or so until we get this August 12th crop report out of the way.
• 2:12
  SPEAKER_00: Uh longer term, we still remain bullish CBOT corn.
• 2:16
  SPEAKER_00: As for soybeans, the U.S.
• 2:18
  SPEAKER_00: soybean condition rating was unchanged yesterday at 63% rate of go dexellant.
• 2:23
  SPEAKER_00: I've got a map of corn and um uh not a map, sorry, got a chart of corn and soybean condition ratings on the bottom of page one.
• 2:32
  SPEAKER_00: This rating remains slightly above average for early August, and you can see on the the state-by-state maps on page three, um, the mid-south up into the central part of the corn belt are mostly good.
• 2:47
  SPEAKER_00: Some plain states and the Atlantic coastal areas are less good.
• 2:51
  SPEAKER_00: Net net, this type of condition rating implies a yield at or above USDA's current 53 bushel per acre yield for the U.S., maybe even as much as one bushel higher.
• 3:06
  SPEAKER_00: Excuse me.
• 3:08
  SPEAKER_00: And that is uh the bulk of the reason that CBOT corn, I mean sorry, CBOT soybeans are trading lower this morning.
• 3:15
  SPEAKER_00: But let's be honest, the last three days, Friday, Monday, today, we've bounced around erratically and really gone nowhere.
• 3:21
  SPEAKER_00: We're unchanged for the three days.
• 3:23
  SPEAKER_00: I'm afraid this is what the soybean market may look like until we get the USDA crop report out of the way next week.
• 3:29
  SPEAKER_00: Meanwhile, the latest USDA soybean crush data was released yesterday showing June soybean crush was up 11% from last year.
• 3:41
  SPEAKER_00: And the most impressive part of this, this is implies that June U.S.
• 3:47
  SPEAKER_00: soybean meal usage was up a whopping 10% from last year.
• 3:53
  SPEAKER_00: We are disappearing a mountain of meal domestically.
• 3:57
  SPEAKER_00: That makes U.S.
• 3:58
  SPEAKER_00: meal exports so critical.
• 4:00
  SPEAKER_00: If meal exports pick up even slightly, it becomes very bullish pretty quickly.
• 4:06
  SPEAKER_00: As for CBOT soybeans, until we get the August crop port out of the way next week, we suspect that CBOT soybean prices kind of bounce around and just mostly trade sideways like we have the last several days.
• 4:19
  SPEAKER_00: As for weather, um you've got a system coming across Iowa, northern part of Illinois, southern part of Wisconsin the next several days, and then you've got a system in the central and eastern corn belt uh early next week.
• 4:35
  SPEAKER_00: Um temperatures are still warm above normal, and particularly in the southern plains, Texas, uh, Oklahoma, up into Kansas.
• 4:46
  SPEAKER_00: Um, and then later in the week they start to heat up uh even areas to the north.
• 4:52
  SPEAKER_00: And uh that's really got that's it for today.
• 4:55
  SPEAKER_00: Uh please take a look at page three.
• 4:57
  SPEAKER_00: Uh you can see these condition rating maps uh where you can see where uh the states rank compared to the 20 year average, who's good and who's not.
• 5:07
  SPEAKER_00: That's it for today.
• 5:09
  SPEAKER_00: Thanks for listening.
• 5:10
  SPEAKER_00: We'll be back tomorrow.