Corn and soybeans reversed to close higher on Wednesday on technical buying as well as improved demand.
Rich Nelson with Allendale, Inc. says the trade is anticipating another strong weekly export number on Thursday for soybeans and especially corn with the recent string of flash sales.
Private exporters reported another 3.9 million bushels of corn was sold to unknown destinations Wednesday morning, in addition to 4.8 million bushels of soybeans to China and 10.8 million to unknown, all for 2024-25.
Ethanol production was also up for a sixth week at 1.081 million barrels, an increased of 39,000 barrels per day verses last week and ethanol production is up 2.6% compared to last year.
On the export front Nelson says the bears could argue that the uptick in business is all front loading by exporters due to the uncertainty about trade policy before the U.S. Presidential election.
“The question now is about future sales especially now that Brazil is cheaper than us for current bids and there are concerns about low water levels on the Mississippi River,” he adds.
He thinks with the current export pace corn prices have put in a low and are undervalued by about 30 cents.
“And that is probably an export risk which I can’t say is really wrong for right now,” he explains.
However, for soybeans he thinks there is a chance the $9.55 contract low could be taken out especially if South America continues to see improving weather for planting.
“So Argentina already has two weeks of rains under their belts. Brazil for two weeks had near normal rains and the forecast for this week and the next two weeks ahead we’re still looking at above normal rain,” he states.
Plus, the current devaluation of the Brazilian Real to the U.S. dollar is making their soybeans cheaper.
So, Nelson thinks the soybean market is trading a 20 to 50 million bushel export risk but the current estimate may need to be lowered by 75 to 100 million bushels.
” So that puts in question whether or not a major low is in the market or not,” he says.
