DTN Daily Basis Comments

Wednesday 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 unchanged at 24 cents under the May futures contract while the DTN National Corn Index was unchanged at $3.36. The national average basis for soybeans was unchanged at 85 cents under the May futures contract while the DTN National Soybean Index was unchanged at $8.14. The national average basis for HRW wheat was 1 cent stronger at 13 cents under the May futures contract while the DTN National Hard Red Winter Wheat Index was down 4 cents at $4.14. The national average basis for HRS wheat was unchanged at 34 cents under the May futures contract while the DTN National Hard Red Spring Wheat Index was down 1 cent at $4.89.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.36 $0.00 -$0.24 May $0.002
Soybeans: $8.14 $0.00 -$0.85 May $0.004
SRW Wheat: $4.35 -$0.06 -$0.24 May $0.001
HRW Wheat: $4.14 -$0.04 -$0.13 May $0.003
HRS Wheat: $4.89 -$0.01 -$0.34 May -$0.005

CORN:

The DTN National Corn Index for Tuesday indicated a national average basis of 24 cents under the Chicago May futures contract, unchanged from Monday's basis. It's almost like corn forgot to trade Tuesday as it closed unchanged in the May, July and Sept futures, unable to make up its mind as to what to do next. There was plenty of news on the day starting with the USDA forecasting a higher than expected ending stocks report today, a bearish scenario at best. On the flip side, there is the forecast for another massive winter storm to hit, with DTN weather forecast showing heavy rain then snow and blowing snow impacting Wyoming, South Dakota, west and north Nebraska, southwest, central and northeast Minnesota Wednesday into Thursday, followed by well below normal temperatures. A foot or more of snow is possible in eastern South Dakota and southwest Minnesota. This storm is certain to add to an already delayed spring planting season for farmers. Basis for shuttles delivered to the Pacific Northwest was weaker at +110K as secondary shuttle freight levels continue to move lower. The bid for April is at $100 per car over tariff, with offers at $300 per car. Ethanol plant basis was steady to higher as some plants are ending spring maintenance and needing to buy corn; especially since farmer selling has been slow due to weakness in the flat price.

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SOYBEANS:

The DTN National Soybean Index for Tuesday indicated a national average basis of 86 cents under the Chicago May futures contract, unchanged from Monday's basis. Like corn, soybeans also ended the day unchanged after Tuesday's USDA report was neutral for the market. With no results coming out of the trade talks between the U.S. and China, the market was unsure of which direction to take. The market is keeping watch on Brazil's harvest with estimates that harvest is 83% complete and expectations for a near record production for the 2018-2019 crop. There are still no bids posted for soybeans delivered to the PNW until June, signaling not only a slowdown in demand, but the lack of China business that had been expected recently. Processor basis is steady, but expect logistics to become a problem for truck and rail movement in the Midwest in the areas where the storm mentioned in corn comments is expected to hit. The Gulf basis was 1 cent stronger, but not much has changed as far as poor conditions for barges heading south of St. Louis in to the Gulf area. Heavy weekend rains on New Orleans only exacerbated the high water conditions, keeping safety protocols in place.

SOFT RED WINTER WHEAT:

The DTN National Soft Red Winter (SRW) Wheat Index for Tuesday indicated a national average basis of 24 cents under the Chicago May futures, 1 cent stronger than Monday's basis.

HARD RED WINTER WHEAT:

The DTN National Hard Red Winter (HRW) Wheat Index for Tuesday indicated a national average basis of 13 cents under the Kansas City May futures contract, 1 cent stronger than Monday's basis. The cash price came under pressure from Monday afternoon's crop progress report showing HRW wheat and white wheat ratings improving last week, while SRW wheat rating remained unchanged versus the prior week. Not much is going on as far as basis; the export market has been quiet and while Algeria is in for wheat again, it is expected that the French wheat will get the business. Egypt rejected a cargo of French wheat because of higher than allowed ergot levels and reports note that they recently purchased a cargo of Romanian wheat outside of a tender.

HARD RED SPRING WHEAT:

The DTN National Hard Red Spring (HRS) Wheat Index for Tuesday indicated a national average basis of 34 cents under the Minneapolis May futures contract, unchanged from Monday's basis. The Minneapolis spot HRS wheat cash market closed as follows, basis the Minneapolis May futures contract for #1 milling quality: 12% proteins were not quoted; 13% proteins were at +115N; 13.5% proteins were unchanged at +110N; 14% proteins were at +110*; 14.5% proteins were not quoted and 15% proteins were unchanged to up 15 cents at +110N to 125. Receipts were 23 cars, which included zero trains.* (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 Mary Kennedy on Twitter @MaryCKenn

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Mary Kennedy

Mary Kennedy
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