Futures markets for corn, soybeans and wheat aren’t providing much for growers to be thankful for ahead of Thanksgiving. But basis in the cash market is perking up thanks to tight farmer holding and in some cases lower transportation costs and better demand.
The U.S. Army Corps of Engineers says the Mississippi River is closing Sunday in Minneapolis, though locks to the south will stay open at least until Dec. 12, weather permitting, when work begins in Guttenberg, Iowa. That has shippers scrambling to fill barges. With plenty available now, the cost of shipping corn down the Illinois River to the Gulf dropped more than 7 cents a bushel, helping firm basis along parts of the export pipeline.
While basis went into hibernation for the winter in the Twin Cities, gains elsewhere were mostly good. Corn on the Illinois River was bid around 6.5 higher this week with Davenport, Iowa strengthening 7 cents. The news wasn’t so good along the Ohio River, which has been plagued by problems this year. Corn basis there was off a nickel, while basis at most Midwest ethanol plants also weakened as inventories built last week.
While the cash corn market is firming, basis in most areas is much weaker than average and below last year’s readings. Average corn basis strengthened nearly three cents at terminals and two cents in the country but is running around 14 cents weaker than the five-year average. Bids were steady to a little weaker on some rail lines in Nebraska and Kansas and country basis seemed appeared weaker to in livestock areas of the Carolinas and southwestern Plains.
December-July carry in futures firmed a little along with basis, but still closed Thursday at 28.25 cents. That could provide an incentive to store, though potential appreciation depends on how much transportation costs could ease into spring. Certainly those with nowhere to go with their corn are finding incentives. Bids along the river south of Red Wing, Minnesota, are offering more than 50 cents carry to river open for both corn and soybeans.
Soybean bids firmed even more than corn, strengthening more than 7 cents at terminals and a nickel overall. Iowa bids along the river were up a dime with the Illinois River strengthening 16 to 18 cents after November went off the board with modest deliveries. Processor basis also firmed 10 to 20 cents from Illinois west, but was weaker in the east. Country basis was also mixed on the central and southern Plains.
Average soybean basis remains 25 to 30 cents weaker than average, but is at least firming towards last year’s levels as the crop is tucked away with completion of harvest.
Wheat bids remain a story of have and have-nots. Soft red winter wheat export demand is weak, holding back gains from the south into the eastern Midwest. But white wheat basis is enjoying above average exports and basis, with hard wheat bids fared better on the Plains. Hard red winter wheat basis jumped again this week, though it’s gaining from historically weak levels. Export demand has improved and big carries in futures encouraged the grain to move into storage under the strong hands of hedgers.
The interactive maps below show how basis fared around the country. Click the box in the upper left-hand corner of the map to bring up the legend, and to turn features show on or off.
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Senior Market Analyst Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Adviser. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.