Market Matters Blog

CORN

National average corn basis this week of 10 cents over the May futures is 1 cent lower than last week, but continues to move higher than the 5-year average strongest basis level at this time. As the cash price of corn has continued to rise, basis levels have receded in some areas where farmers have moved physical product to market to cover seed and chemical costs. Also hampering farmer movement is the beginning of spring load restrictions on fragile roads in the Midwest. Demand for corn from ethanol plants is steady with reports of facilities that were closed temporarily in late summer coming back on line this month. Cash corn prices are cheaper relative to the higher prices in August, allowing better margins for ethanol plants.

SOYBEANS

National average soybean basis of 9 cents under the May futures is 1 cent lower than last week, but continues to move well above the 5-year average of the strongest basis at this time. Soybean cash prices keep dropping, partially due to continued harvest in South America. This has put pressure on soybean exports out of the Gulf, even as port problems still exist in Brazil. Basis weakness was seen along the river even though barge freight was 5% to 10% lower in all river corridors late last week as demand for soybean loadings has slowed. In the interior, basis levels were steady as the cash price has been unable to sustain gains in the futures.

HARD RED WINTER WHEAT

National average HRW basis for this week at 30 cents under the May futures is above the 5-year average of the strongest basis at this time and is down 1/2 cent from last week. Basis strength was once again seen in the PNW with demand increasing for export business. Basis was mixed for spot HRW wheat as physical supplies of wheat to meet the needs of mills were steady. The weather will continue to drive the winter wheat markets as the wheat comes out of dormancy. Rain will be key to help the wheat mature and to replenish the still very-dry subsoil in many key growing areas.

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