Market Matters Blog

HRW

HRW basis strength was noted recently in the PNW export market after Taiwan bought U.S. HRW wheat for the first time in five weeks. Even though U.S. wheat has been cheaper, we are having a hard time capturing steady amounts of export business. However, wheat export inspections of 27.9 million bushels reported for the week ended March 7 were above the amount needed to stay on pace with USDA's marketing year projections, as well as being above the trade expectations. Most of the loadings were SRW and HRW wheat at the Mississippi River and Texas Gulf with the balance out of the Columbia River on the PNW. With winter wheat demand (HRW and SRW) spread thin among end users (mills, feeders, exporters) and farmers selling very little, HRW wheat basis continues to stay strong. Besides the low cash price, many farmers are not selling until there is a better idea of what the crop looks like as it comes out of dormancy.

Corn

National average corn basis this week of 12 cents over May futures is marginally higher than last week and continues to move higher than the 5-year average strongest basis level at this time. Corn basis remained firm as farmers continue to hold old-crop supplies as the corn cash price was unattractive most of last week. Farmers are also looking ahead to spring corn planting and acquiring drought-resistant seed which has been reported to be in short supply. Many Midwest ethanol plants posted higher corn basis late last week as ethanol prices had been stronger compared to the weakness we saw in cash corn prices.

Soybeans

The national average soybean basis of 7 cents under the May futures is 1/2 cent lower than last week, but continues to move well above the five-year average of the strongest basis at this time. The basis was mixed for soybeans after some end users met their nearby needs late last week when the cash price was as high as $15.30 in parts of Illinois and Indiana and $15.00 to $15.20 in parts of Nebraska and Iowa. There are reports of some end users pushing cash bids for next month before the farmers head to the fields and may be too busy to sell. Late last week, we saw mixed basis levels along the river as barge freight remained steady in most corridors and demand was steady for soybeans to the Gulf. Soybean inspections in the Mississippi and Texas Gulf increased 45% during the week ended Feb. 28, according to USDA's weekly Grain Transportation Report. Monday, even though the weekly export inspection number for soybeans of 17.1 million metric tons was lower than the trade estimate, the inspections each week continue to be well above the number needed to stay on pace with USDA predictions.

(ES/CZ)

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