The holiday rally in the futures market, combined with the arrival of the new tax year, caused farmers to pick up the pace of sales this week, generally leading to weaker basis across much of the country. While weak basis is nothing new corn and wheat, even the red-hot bean cash market saw bids cool off.
The setback in basis came at a time when transportation costs continued to ease due to lower fuel prices and weaker demand. Both barge and rail rates pulled back, but those savings weren't passed on to the farmer in the form of better cash bids, as supplies exceeded demand.
Ocean freight rates are finally starting to lift their head above water, after falling more than 95% from May's all-time highs. Commodities are again starting to move around the world, though traffic is still slow due to the global economy slowdown. To read Bryce Knorr's weekly basis review, click HERE.