Market Matters Blog

Corn

National average corn basis this week of 34 cents over the July futures is unchanged from last week and 20 cents higher than the 5-year average strongest basis level at this time. Corn basis remains strong as exporters and processors push bids to entice farmer selling amid a strong cash market. While basis at ethanol plants has remained steady to even lower at some plants, corn basis for export started to move higher late Friday. There were reports that new corn business for export had been done ahead of the Argentine farmer strike, which would stop corn sales/deliveries to the main port there. Traders reported that CIF NOLA (cost of freight and insurance at New Orleans) corn basis bids for loaded barges on the water traded at 120CN early this week, which was said to be the highest basis level on record for this time of year. With the nearby demand strong for corn, barge freight moved higher in the Illinois corridor and lower Mississippi River corridor for spot barges. The weekly inspection report on Monday showed that for the week ending June 13, corn inspections were higher from the prior week and actually moved past the total bushels needed each week to reach USDA estimates for the year.

Soybeans

National average soybean of 68 cents over the August futures is 2 cents higher than last week. Soybean basis is moving to the August futures earlier than normal in June at a 72-cent spread from July futures, which gained strength vs. the deferred months due to tight cash supplies and late planting. Processors struggle to buy corn for daily crush needs as farmers are still absent from the market while they try to finish planting. USDA reported on Monday that 85% of the crop was planted vs. the 5-year average of 91% with Iowa, Minnesota and Wisconsin behind due to continued rains causing poor planting conditions. Tight supplies may begin to have an effect on processors' ability to run at full speed until new crop becomes available. Basis along the river was stronger last week as river terminals continued to load previous commitments stalled by lock closures on the river the prior week. The Mississippi River at St. Louis was just below flood stage on Tuesday at 29.02 feet and is expected to rise slightly on recent heavy rain, but will start to drop by the weekend.

Hard Red Winter Wheat

National average HRW basis for this week at 16 cents under the July futures is up 1 cent from last week and is higher than the DTN 5-year average of the strongest basis at this time. Exporters with wheat sold to Brazil push to load vessels before August 1 when Brazil resumes the 10% tariff after suspending it on April 1 due to a temporary shortage of wheat in the country. Mills continue to pay a premium for nearby supplies as they wait for new-crop wheat and compete with feeders for old-crop supplies. USDA reported harvest is behind for this time of year at 11% vs. the 5-year average of 25% with Oklahoma, North Carolina, Missouri and Arkansas behind by 30% to 50% of their 5-year average. Winter wheat harvest in Kansas has barely started and is 21% behind the 5-year average. USDA also reported that development of the new crop was lagging in Colorado, 25% behind their 5-year average and South Dakota, 34% behind their 5-year average planting pace.