Market Matters Blog

Corn

National average corn basis this week of 6 cents over the May futures is 2 cents higher than last week and continues to move higher than the 5-year-average of the strongest basis level at this time. Basis levels at Midwestern ethanol plants have been stronger as ethanol prices did not follow the steep losses in the cash corn price since Thursday's surprising USDA stocks report. The EIA report stated for the week ending March 22, stocks of ethanol were down 1 million barrels, the lowest level since December 2011. Even though more plants came back on line in March as margins showed some improvement, acquiring physical corn may become more difficult when farmers head to the fields. Farmers also ran from the market due to the 95-cent loss in the cash price between Thursday and Tuesday afternoon. The basis in the Texas feed markets has also been weaker as feeders continue to use winter wheat instead of corn in feed rations.

Soybeans

National average soybean basis of 8 cents under the May futures is 3 cents lower than last week, but continues to move above the five-year-average of the strongest basis at this time. The soybean basis was higher to end last week after various processors raised basis levels due to slow cash movement because of poor road conditions early last week delaying delivery to end users. Basis levels also improved last Thursday after the bearish USDA stock report sent the cash price of soybeans 47 cents lower to end the day. Basis bids along the river were steady to weaker except in the St. Louis and Illinois corridors where barge freight was lower. Even though soybean exports have slowed out of the Gulf, beans are still moving down river. The Mississippi River opening season in St. Paul, Minn., has been delayed because barges are unable to make it past Winona due to 20 inches of ice in Lake Pepin. Basis levels in that area have been weaker and producer delivery is determined by buyers until barges arrive for loading.

Hard Red Winter Wheat

The national average HRW basis for this week at 29 cents under the May futures is still above the 5-year average of the strongest basis at this time and is unchanged from last week. Concern remains as to how much damage was done in parts of Oklahoma and Texas where temperatures spent nearly 2 days in the low to mid 20s last week. A frost and light-to-hard freeze was also reported early last week in the Delta as far south as Louisiana. While the extent of freeze damage may not show for at least another week, the first HRW wheat crop progress report of the season showed conditions declined over the winter in 10 of 18 key growing states. Of those states, South Dakota is showing 76% of their crop in poor to very poor condition, Texas and Nebraska show 49% poor to very poor and 42% of the wheat in Colorado is poor to very poor. Millers are concerned about poor spring conditions, possible frost damage and if the quality of the new crop will be compromised.

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