Soybean basis moved sharply weaker at many locations this week, with the approaching harvest finally rolling nearby bids to new crop levels. While new crop beans are only starting to hit the pipeline, lack of nearby demand from processors and exporters allowed the trickle to act like a flood.
New crop basis for all crops this year has been weak, as elevators build in huge margins to offset their risk from unpredictable basis moves, high transportation costs and large margin calls on hedges. Nearby soybean basis, by contrast, was much stronger due to very tight old crop supplies that forced end users to bid up cash prices to attract supplies.
The only area where bean basis firmed was at the
To read Bryce Knorr's complete weekly basis review, click HERE.