DTN Daily Basis Comments

DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was 2 cents weaker at 17 cents under the March futures contract while the DTN National Corn Index was up 23 cents at $5.00. The national average basis for soybeans was unchanged at 43 cents under the March futures contract while the DTN National Soybean Index was up cents at $13.75. The national average basis for HRW wheat was unchanged at 26 cents under the March futures contract while the DTN National Hard Red Winter Wheat Index was up 28 at $5.96. The national average basis for HRS wheat was 2 cents weaker at 27 cents under the March futures contract and the DTN National Hard Red Spring Wheat Index was up 13 cents at $5.94.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$5.00	$0.23	-$0.17	Mar	-$0.023
Soybeans:	$13.75	$0.45	-$0.43	Mar	-$0.005
SRW Wheat:	$6.47	$0.30	-$0.18	Mar	-$0.004
HRW Wheat:	$5.96	$0.28	-$0.26	Mar	-$0.010
HRS Wheat:	$5.94	$0.13	-$0.27	Mar	-$0.015

CORN:

The national average corn basis for Tuesday is at 17 cents under the March futures, 2 cents weaker than Monday's basis. March corn locked limit up (25 cents) after the bullish USDA report and spent the rest of the day there. That means expanded limits of 40 cents will be in place for the market when it opens again. You can thank the USDA report for the fireworks Tuesday after they estimated a lower U.S. corn yield, which meant lower production. Estimates revised lower for feed, ethanol and export demand put the corn carryout at 1.552 billion bushels (bb), the lowest in seven years. Ethanol futures yawned and didn't seem to care much, closing unchanged again. Feed prices meanwhile haven't supported a lower usage model as demand has remained brisk so far this year, but corn is definitely becoming overpriced for many feeders who have turned to the cheaper wheat as have some foreign countries. Bottom line is that protein itself is in demand and protein supplies are very tight this year. The track PNW basis was steady and CIF NOLA basis was unchanged. On the domestic side of things however, corn basis has been falling throughout the Midwest since after the futures surged on Tuesday. Since the first day of 2021, the cash price of corn as jumped 32 cents and if you go back to the December 2020 USDA reports, the cash price has gained 95 cents. Ethanol plants especially are in a rough spot with the higher cash price as it stresses margins already under pressure.

SOYBEANS:

The national average soybean basis for Tuesday is at 43 cents under the March futures, unchanged from Monday's basis. March soybeans closed sharply higher, up 45 3/4 cents, after the USDA reports estimated soybeans ending stocks on lower production with a change in yield of in yield from 50.7 bpa to 50.2 bpa. USDA also forecast a higher crush and exports versus December forecast amid very tight supplies of soybeans. Soybean meal also surged on the day, up $18.60 and soybean oil didn't do anything, ending the day unchanged as crush margins came under pressure. Before the report, the USDA announced in their daily reporting system that private exporters 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020-21 marketing year. After the dust settled at the end of the day, the DTN National Soybean Index was crawling closer to $14 at 13.75 and versus the December 2020 USDA reports, had gained $2.69 per bushel. The track PNW basis was unchanged, while track St. Louis was 3 cents weaker and January CIF NOLA basis was 4 cents stronger. The nearby barge freight perked up as shippers have begun looking for freight again as the cash market rose. Processor basis was weaker for the most part as the surge in the soybean cash price gave basis a break from adding to the price.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Tuesday is at 18 cents under the March futures, 1 cent weaker than Monday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Tuesday is at 26 cents under the Kansas City March futures, unchanged from Monday's basis. The March KC futures joined the party on Tuesday, closing up 28 1/2 cents after the USDA report offered some unexpected surprises. USDA forecast 2020/21 wheat ending stocks at 836 million bushels versus the average trade estimate of 859 million bushels. 2021 wheat seedings were forecast at 31.99 million acres versus average trade estimate of 31.53 million acres. Given the ongoing drought in some key areas, the watch is on to see how the new crop winter wheat fares over the winter and into the spring. As far as milling basis goes, mills still want low protein and have turned away from paying up for higher proteins.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Tuesday is at 27 cents under the Minneapolis March futures, 2 cents weaker than Monday's basis. The Minneapolis spot spring wheat cash market closed as follows, basis the Minneapolis March futures contract for No. 1 milling quality: 12% proteins were not quoted; 13% proteins were not quoted; 13.5% proteins were unchanged at +105N; 14% proteins were unchanged at +115N; 14.5% proteins were unchanged +100N to +110N; 15% proteins were not quoted. Receipts were 0 cars, which includes zero train(s). (Bid=B Ask=A Nominal=N) Wheat on the MGEX floor is traded delivered Chicago/beyond.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

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