Grain basis was mostly stable this week for corn and soybeans with neither commodity showing any strong trends on the week. On average, US corn basis was up 0.9 cents a bushel while soy basis was up 0.7 cents.
In corn, basis levels were firmer across the Southern Plains and river terminals this week. The Gulf market inched higher by 1 cent a bushel but river terminals as a group were consistently 2 to 4 higher on the week. Meanwhile, ethanol plants as a group were mostly flat, but there was some higher bids at some plants in the WCB that ranged from 3 to 5 above last week.
For soybeans, basis levels at river terminals were a drag on the broader market as river terminals as a group sinking 3.5 cents on the week while the Gulf basis actually was bolstered by 2 cents on the week. For soy crush facilities, the basis was up 2.7 cents a bushel with 5 to 8 cent gains fairly typical across the plants in the WCB.
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Grains saw renewed volatility this week with spring wheat futures hitting two-year highs. On the week, however, it was more mixed for the broader complex with corn down 6, soybeans down 3 and Chicago wheat up 5.
Weather in the Northern Plains continues to be a region of concern as persistent drought and heat start to weigh on spring wheat production. USDA’s crop progress report on Monday showed a deep slide in spring wheat conditions to 45% good-to-excellent off from 55% last week and 65% the previous week. For corn, the conditions did slip to 67% as compared to 68% last week. For soybeans the first reading of the year came in at 66%, off of the 70% expected.
Heading into the weekend, the latest US model runs continue to show good precipitation coverage from IL to the East for the next two week period while the Central Plains, Northern Plains and WCB will see limited rainfall. Temperature patterns should follow the rain development with the same areas expected to be dry should see above normal temp readings in this two-week period.
Export business continues to be mostly light especially for new-crop corn and soybeans. Year-to-date totals for new-crop soybean sales are running nearly 40% off the pace last year, but USDA has penciled in a 5% growth factor in exports for the new-crop 2017 marketing year. Likewise, corn forward sales are off 31% from last year but for new-crop corn USDA is already factoring in a shortfall of 16%.
In international markets, France and much of Western Europe continue to face drought-like conditions. This week private consultant Strategie Grains cut its forecast for the EU wheat crop to 141.6 MMT, down 1.1 MMT from last month, but still 4% above the 136.1 MMT in 2016, when output was curbed by a poor French crop. For corn, they noted a slight cutback of 0.1 MMT to 60 MMT which would be unchanged from last year. But they noted the weather is set to remain dry in most of the primary corn growing countries and the condition of the crop could deteriorate rapidly.