Sharply higher barge freight rates this week coupled with increasing harvest pressure sent basis lower at many locations this week, despite the steep break in futures prices that discouraged cash sales. While falling futures often works to firm basis, it's difficult to rally cash much in early October unless yields are short. While the jury's still out on the 2008 crop, yields are at least holding somewhat steady to projections, keeping end users in the buyer's seat.
With more grain hitting the pipeline this week, barges rose, increasing the cost of shipping grain to the Gulf five to 10 cents a bushel. There were signs, however, that buyers were starting to push bids a little to attract supplies.
Cash corn bids dropped below $4 a bushel at some locations this week, but the combination of futures carry and weak basis provided at least some hope of higher prices later in the fall once harvest is done. Barge freight on December slots was 32 to 38 cents a bushel lower, a trend reflected in a few of the bids at terminals for later delivery. To read Bryce Knorr's complete basis review, click HERE.