With nearby July Futures reaching first notice day on Friday, basis levels plummeted to be on par with the expiring contract. For the week, spot corn basis was off 15 cents a bushel while spot bean basis was off 25 cents a bushel.
The brunt of both the bean and corn collapse was felt in the Western & Eastern Cornbelt as basis levels there had been at exceptionally lofty levels over the last month, tied to end-user demand. Along river markets tied to grain delivery for the CBT contracts, basis levels fell relatively less as they had failed to keep step with the outlying markets as they moved higher.
On Friday, USDA’s latest stocks and acreage numbers gave the market new direction. For both corn and beans, stocks came in lighter than expected as of June 1. This, combined with a late start to the growing season for new-crop corn and beans, could make for an interesting Aug/Sep window for end users to get their needs met. Some inland end-users are starting to look at sourcing grain from the river & offloading it to trucks to meet their supplies. Look for basis levels to weaken this coming week, but in all likelihood tighter stocks will keep basis levels biased to the upside for key end users.