DTN Daily Basis Comments

Monday Morning Basis Update

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was 1 cent stronger at 32 cents under the May futures contract while the DTN National Corn Index was up 3 cents at $3.41. The national average basis for soybeans was 1 cent stronger at 93 cents under the May futures contract while the DTN National Soybean Index was up 2 cents at $8.19. The national average basis for HRW wheat was 3 cents weaker at 24 cents under the May futures contract while the DTN National Hard Red Winter Wheat Index was down 3 cents at $4.21. The national average basis for HRS wheat was 3 cents weaker at 36 cents under the May futures contract and the DTN National Hard Red Spring Wheat Index was down 3 cents at $5.22.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.41 $0.03 -$0.32 May $0.008
Soybeans: $8.19 $0.02 -$0.93 May $0.012
SRW Wheat: $4.31 -$0.03 -$0.26 May -$0.011
HRW Wheat: $4.21 -$0.03 -$0.24 May -$0.033
HRS Wheat: $5.22 -$0.03 -$0.36 May -$0.025

CORN:

The DTN National Corn Index for Friday indicated a national average basis of 32 cents under the Chicago May futures contract, 1 cent stronger than Thursday's basis. May corn traded lower most of the day, but finally took a turn higher towards the close, posting a 2-cent gain in the May. However, for the week, May lost 11 1/2 cents after closing lower every day except Friday. With the March contract having gone to delivery as first notice day hit on Thursday, traders have been scrambling to liquidate their longs. On top of all that, the winter wheat markets didn't do much for corn this week as they struggled to see the bright light at the end of the tunnel as well, evident in the 21 1/2-cent loss in the Kansas City May futures. The shuttle basis for corn delivered to the Pacific Northwest (PNW) was 10 cents stronger at +140K. Secondary shuttle freight moved higher again with bids for first half March at $3,000 per car over tariff, versus $3800 per car offered. Logistic issues continue to bother traffic heading to the West Coast from Minnesota to the PNW. The CIF Gulf basis was stronger as well, with not much improvement in high water conditions in the Lower Mississippi River down in to the Gulf.

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SOYBEANS:

The DTN National Soybean Index for Friday indicated a national average basis of 93 cents under the Chicago May futures contract, 1 cent stronger than Thursday's basis. Soybeans closed higher Friday, after the U.S. Trade Representative’s Office announced it would give notice in the Federal Register that tariffs on an additional $200 billion in Chinese goods would not rise to 25% on March 2 and would remain at 10% until further notice, noted Informa Economics. In spite of that news, the May contract lost 12 1/4 cents for the week, the largest weekly loss since December. The market was under pressure most of the week due to the continued uncertainty how many U.S. soybeans China actually intends to purchase. Along with that, the South American weather has been nearly ideal for the crop there. The basis for shuttles delivered to the PNW was 13 cents stronger at +70K. The rail basis delivered to St. Louis was stronger as ice conditions late in the week, on top of a weekend snowstorm caused loadings to stop because it became unsafe to get on barges. The CIF Gulf basis was stronger as conditions in the Gulf remain hard for barge unloading and vessel loadings. Barge operators noted that on top of the high water, fog in the Gulf and Canals would continue through the weekend into Monday morning.

SOFT RED WINTER WHEAT:

The DTN National Soft Red Winter Wheat (SRW) Index for Friday indicated a national average basis of 26 cents under the Chicago May futures, 1 cent weaker than Thursday's basis.

HARD RED WINTER WHEAT:

The DTN National Hard Red Winter Wheat (HRW) Index for Friday indicated a national average basis of 24 cents under the Kansas City May futures contract, 3 cents weaker than Thursday's basis. The spot KC basis had another good day with 13% through 14% cars offered trading 11 cents stronger. The flat price continues to fade, as the U.S. can't get any export business done, even at posted lows. Basis on the interior remains firm and rail car costs are causing export bids to become stronger in order to attract selling.

HARD RED SPRING WHEAT:

The DTN National Hard Red Spring Wheat (HRS) Index for Friday indicated a national average basis of 36 cents under the Minneapolis May futures contract, 3 cents weaker than Thursday's basis. The Minneapolis spot hard red spring wheat cash market closed as follows, basis the Minneapolis May futures contract for #1 milling quality: 12% proteins were not quoted; 13% proteins were not quoted; 13.5% proteins were not quoted; 14% proteins were not quoted; 14.5% proteins were down 10 cents to unchanged at +150 to +160N and 15% proteins were unchanged to down 5 cents at +140 to +175. Receipts were 35 cars, which included zero trains.* (Bid=B Ask=A Nominal=N) Wheat on the MGEX floor is traded delivered Chicago/beyond.

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

Follow Mary Kennedy on Twitter @MaryCKenn

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Mary Kennedy

Mary Kennedy
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