Grain exports have been taking a hit lately, and the situation is likely to remain challenging for now.
“USDA has been bringing down their export pace almost continually since September,” says Rich Nelson, chief market strategist for Allendale. “It’s not going to get any better.”
On the corn side, export markets are about 52% sold, compared to 65% normally. But as Argentina’s bargain-priced corn starts to get a little more costly thanks to recent demand, those numbers could improve for U.S. corn.
For now, the softer export situation is not expected to affect U.S. corn prices, according to Nelson. “The way the market is priced, I think it already has most of this export situation priced in,” he says.
Does that mean rallies are out of the question? Not necessarily. “We will have moderate rallies based on weather events,” Nelson says.
Watch AgDay’s AgriBusiness segment below:
On the soybean side, Nelson says there have been tremendous sales coming out of South America and the U.S. is having a hard time competing with those prices.
Nelson says Argentina will remain the “cheapest store in town” for a while, but notes that the U.S. isn’t completely out of the game. “We’re still getting some sales here,” he explains. “This past week we sold 900,000 metric tons. That’s not something to sneeze at.”
The market may just need to adjust its expectations. “On the positive side, we’ll still get a few sales,” Nelson says. “Exports just won’t be our major demand source right now.”