DTN Daily Basis Comments

DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was 1 cent weaker at 18 cents under the March futures contract while the DTN National Corn Index was up 6 cents at $5.06. The national average basis for soybeans was unchanged at 43 cents under the March futures contract while the DTN National Soybean Index was down 12 cents at $13.63. The national average basis for HRW wheat was 1 cent weaker at 27 cents under the March futures contract while the DTN National Hard Red Winter Wheat Index was up 3 cents at $5.99. The national average basis for HRS wheat was unchanged at 27 cents under the March futures contract and the DTN National Hard Red Spring Wheat Index was up 8 cents at $6.02.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$5.06	$0.06	-$0.18	Mar	-$0.010
Soybeans:	$13.63	-$0.12	-$0.43	Mar	$0.002
SRW Wheat:	$6.42	-$0.05	-$0.19	Mar	-$0.005
HRW Wheat:	$5.99	$0.03	-$0.27	Mar	-$0.001
HRS Wheat:	$6.02	$0.08	-$0.27	Mar	-$0.002

CORN:

The national average corn basis for Wednesday is at 18 cents under the March futures, 1 cent weaker than Tuesday's basis. March corn continued to show off midweek, up 7 1/4 cents, closing at a new contract high as the market is still trading the bullish USDA report from Tuesday. The weekly EIA report didn't do much for corn demand in that plants are not pushing production, especially given the high corn price and the lack of growth in blending demand. The market is scratching its head over the lower-than-expected estimates of the 2020 U.S. corn crop, 2020-21 ending stocks and Dec. 1 corn stocks as the fall 2020 harvest went rather smoothly for so many states, especially ones that struggled in 2019. In the meantime, the market will trade the numbers as the high cost of feed and cash corn is making it expensive for feeders and ethanol plants. The track PNW basis was 10 cents weaker for January and 8 cents weaker in February as the saga of the "Demise of the Corn Basis" continues. Country corn basis in the Midwest is falling and hearing some ethanol plants are full and not taking corn. Most of that corn being hauled was likely pre-contracted for January arrival, while warmer weather has sent farmers hauling old crop either on contract or free price later or fresh sales given the rise in the cash price.

SOYBEANS:

The national average soybean basis for Wednesday is at 43 cents under the March futures, unchanged from Tuesday's basis. March soybeans closed down 12 cents after contract highs sent traders to take profits and in spite of fresh export business. The USDA reported that private exporters sold 396,300 metric tons (mt) of soybeans to unknown destinations for delivery during the 2020-21 marketing year and 68,000 metric tons for delivery during the 2021-22 marketing year. The higher prices continue to pressure the crush, but export business so far continues. Soybean meal followed soybeans lower, closing down $8.30 and soybean oil closed down 45 cents. Soybean oil is fading as palm oil futures continue to fall on expectations for lower exports in January as export tariffs increased this month. Processor basis has been weakening due to the tight margins amid higher cash prices. The track PNW basis is as flat as a pancake and CIF NOLA remains unchanged, but firm.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Wednesday is at 19 cents under the March futures, 1 cent weaker than Tuesday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Wednesday is at 27 cents under the Kansas City March futures, 1 cent weaker from Tuesday's basis. The KC March closed up 3 1/2 cents after confirmation of an increase in export tax in Russia was announced by Russia's Agriculture Ministry. The Ministry proposed an increase in the planned wheat export tax to 45 euro per metric starting March 15 to June 30. The tax between February 15 to March 15 will be 25 euro per metric ton. The market feels this news could be beneficial to U.S. hard red winter and spring wheat exports.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Wednesday is at 27 cents under the Minneapolis March futures, unchanged from Tuesday'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 at +105*; 13.5% proteins were unchanged at +105N; 14% proteins were down 10 cents to unchanged at +105* to +115; 14.5% proteins were up 5 cents to down 5 cents +105; 15% proteins were at +90 to +140. Receipts were 88 cars, which includes two 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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