Market Matters Blog

SOYBEANS

National average soybean basis of 91 cents over August futures is 2 cents lower than last week but sharply higher than the DTN 5-year average strongest basis. Soybean basis is firm as end user demand is strong, especially in areas where farmer selling has ceased. Basis along the upper Mississippi River weakened as 4 locks remain closed between Muscatine, Iowa, and Canton, Mo. Locks 16-20 are expected to reopen by July 6 or sooner as long as the weather cooperates. Monday's USDA Crop Progress report showed as of June 23, U.S. soybean planting was 96% complete vs. the 5-year average of 98%. Farmers in some areas of Wisconsin and Minnesota continue to deal with fields too soggy to plant. The Minnesota NASS office reported Monday that last week there were 4 days suitable for field work in Minnesota, which is the most so far this year after a cold, wet spring.

CORN

National average corn basis this week of $1.17 over September futures is down 5 cents from last week but is sharply higher than the DTN 5-year average strongest basis level. Corn basis remained firm as cash prices plummeted on sharply lower futures Friday and Monday, under pressure from bearish USDA acreage news. End-users continue to post mixed basis levels depending on nearby supplies for daily grinds. River corn basis was lower as corn movement heading to the Gulf is slowing this week along with river closures late last week stopping barge traffic in the upper Mississippi River corridor. Midwest ethanol plants basis levels were steady with mixed spot cash prices following last week's EIA report showing a 1.2% drop of total U.S. ethanol stocks during the week ended June 21, while production rose 1.4%.

HARD RED WINTER WHEAT

National average HRW basis for this week at 24 cents under September futures is down 1 cent from last week and is higher than the DTN 5-year average strongest basis, even as harvest progresses with nearby milling demand strong along with recent export and feed demand. Basis levels may begin to fluctuate depending on new-crop protein levels with western Kansas reported at 12% to 13% protein and central Kansas at 11% protein and lower. Monday's USDA Crop Progress report stated that U.S. winter wheat harvest is 43% completed vs. the 5-year average of 52% at this time. The latest harvest update from Kansas indicates a wide range of yields with the lowest being in drought-stricken southwestern Kansas and the highest yields seen in central Kansas. Last week, the Oklahoma Wheat Commission reported mixed yields along with low test weights prior to harvest moving north there and nearing completion.

(ES/CZ)

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