Market Matters Blog

Soybeans

National average soybean basis of 46 cents over the July futures is 3 cents higher than last week and continues to move above the five-year average of the strongest basis at this time. Soybean basis remained strong at Midwest processing plants as the old-crop supply remains tight. There were reports of farmer sales in the Midwest after a strong cash price Monday enticed corn to come to market. Weaker basis bids were seen at various terminals along the Illinois River, which remains closed. Recent damage from barges hitting the Marseilles Lock and Dam last week due to high water has caused that area to be closed until repairs are made. As of Monday, all other areas closed on the Mississippi due to last week's flooding were reopened, especially the corridor in central Iowa where basis levels improved as barges began to move in and out of that area. The Louisiana railroad bridge in the middle river, which was hit by runaway barges, was reopened early Tuesday afternoon, allowing barges to pass after waiting on both sides of that corridor.

Corn

National average corn basis this week of 26 cents over the July futures is up 1 cent from last week and continues to move higher than the five-year average strongest basis level at this time. Old-crop corn remains tight and with farmers heading into the fields, nearby supplies will be hard for end users to procure. Corn basis was strong on the interior, with basis levels firm at Midwestern ethanol plants. Last Wednesday's EIA report showed a 2.5% increase in ethanol production for the week ending April 19, which was a two-week high. With the cost of corn having stabilized for most plants, profit margins have been firm and almost all the plants that closed within the last eight months have reopened. The corn basis along the Illinois River was weaker most of the week as terminals are unsure when the river will reopen after damage to the northern lock and dam has caused the river to close

Hard Red Winter Wheat

National average HRW basis this week at 23 cents under the July futures is above the five-year average of the strongest basis at this time and is marginally lower from last week. With little HRW wheat coming to market for sale, the basis remained steady on continued demand from mills, even after the flat price rose late last week as more freezing temperatures were predicted for the already damaged areas of the HRW belt. KC futures rose to their highest level since November of 2012 last Thursday and have continued to climb this week on another round of cold weather predicted to descend on the already fragile crop. USDA's crop condition report on Monday showed a 2% decline in the poor to very poor conditions from last week. Most of the decline was seen in Texas with 68% of the crop rated poor to very poor. The Texas NASS office reported that some farmers in southern Texas were baling freeze/drought damaged crops for hay. Reports from day 1 of the Wheat Quality Council HRW wheat tour showed an estimated average of 43.8 bushels per acre after surveying 277 fields with most of those located in northern and central Kansas. While drought and freeze damage was reported, the scouts will more than likely encounter worse conditions on day 2 of the tour.