Corn had solid basis gains in the Western Cornbelt and Upper Midwest as many ethanol
plants in this region firmed their basis significantly. Gains by key plants were
in the double-digits for the week, putting upward pressure on basis in this region.
Along the river, basis levels were mostly weaker over the last week as barge rates
inch higher. Furthermore, Gulf basis continue to run flat which gives little spark
to interior river markets.
For soybeans, a similar pattern was apparent with the Western Cornbelt witnessing
the most strength for the week. Soybean crushing plants were up on average by 2
cents a bushel, but not as strong as the overall market average. For soybeans, basis
direction will likely be tied to the Gulf export markets in coming weeks. We’ve
had a 25-cent increase in Gulf export soybean basis since the first of November
which has helped push the overall market higher. The same is not true for corn,
however, as Gulf corn basis has been mostly unchanged over the past month.
Basis levels should continue to move higher for the next few weeks. Snow and cold
over the Upper Midwest will likely hamper cash grain movement in these regions and
farmers seem intent on holding out for higher prices. Forward contract basis levels
are running fairly favorable for corn, but less so for soybeans where it is hard
to pencil storage returns by locking in forward basis levels.
Contact Us Cody Bills, Director of Client Relations
Tel: (866) 290 - 1196