DTN Daily Basis Comments

Tuesday Morning Basis Update

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DAILY BASIS:

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.24 $0.02 -$0.35 May -$0.001
Soybeans: $8.91 $0.11 -$0.70 May $0.005
SRW Wheat: $3.63 -$0.02 -$0.39 May $0.001
HRW Wheat: $3.14 -$0.02 -$0.87 May $0.006
HRS Wheat: $4.84 -$0.03 -$0.37 May $0.020

CORN:

The DTN National Corn Index for Monday indicated a national average basis of 35 cents under the Chicago May futures contract, unchanged from Friday's basis. Corn was higher with some support from the lower U.S. dollar and more weather related slowdowns expected for corn planting this week. Rain this week in parts of the Corn Belt and snow, rain and cold in the Northern Plains will stall planting in some of those areas. The market also got support from another good weekly inspections report. Total inspections for 2016-17 were 62% above the year-ago total and still well above USDA's projection for a 17% increase in export demand. After the close, the USDA said that as of April 23, U.S. corn planting was at 17% complete, down from 28% a year ago and vs. the five-year average of 18%. Minnesota, Iowa, Wisconsin, North Dakota and Kansas are currently behind their five year average. Basis remains firm, but farmers are too busy right now to sell anything. The cheap cash price still remains a sticking point for any new sales at this point.

SOYBEANS:

The DTN National Soybean Index for Monday indicated a national average basis of 70 cents under the Chicago May futures contract, 1 cent stronger than Friday's basis. Soybeans closed higher with support from the lower U.S. dollar and also renewed talk that Brazil farmers are not quick to sell new crop soybeans. Agricultural consultant Safras & Mercado reported that Brazil farmers are 93% with their harvest as of April 20, vs. the five year average of 90.4%. Export inspections were bullish with total inspections for 2016-17 so far at 14% above the total vs one year ago and above USDA's projection for a 5% increase in export demand. Basis at the Gulf remains firm at +35K and shuttle basis for last half May delivered to the PNW was stronger at +68K. Processors are still willing to push basis bids, hoping to keep supplies coming. However, farmers are too busy to haul old crop soybeans now.

SOFT RED WINTER WHEAT:

The DTN National Soft Red Winter Wheat Index for Monday indicated a national average basis of 39 cents under the Chicago May futures, unchanged from Friday's basis.

HARD RED WINTER WHEAT:

The DTN National Hard Red Winter Wheat Index for Monday indicated a national average basis of 87 cents under the Kansas City May futures contract, 1 cent stronger than Friday's basis. The spot KC basis for ordinary protein was up 9 cents and up 5 cents for 11% protein. The strength in the Gulf basis is supporting the firm 12% protein bids, but buyers are willing to pay a little more for lower proteins as well. After the close, the CME announced that "effective Sunday, March 18, 2018, and pending all CFTC regulatory review and approval periods, CBOT intends to implement a Variable Storage Rate (VSR) mechanism in its KC HRW Wheat futures. The Exchange intends to implement the VSR mechanism in lieu of seasonal storage rates for the Contracts." The VSR mechanism is currently only implemented in the Chicago SRW wheat contract.

HARD RED SPRING WHEAT:

The DTN National Hard Red Spring Wheat Index for Monday indicated a national average basis of 37 cents under the Minneapolis May futures contract, 2 cents stronger than Friday's basis. The Minneapolis spot HRS wheat cash market closed as follows, basis the Minneapolis May futures contract for No. 1 milling quality: 12% proteins were not quoted; 13% proteins were not quoted; 13.5% proteins were not quoted; 14% proteins were unchanged to down 5 cents at +110; 14.5% proteins were unchanged to up 30 cents at +135N to +165 and 15% proteins were down 15 cents to up 25 cents +170 to +225. Receipts were 27 cars which included zero trains.* Wheat on the MGEX floor is traded delivered Chicago/beyond. After the close, NASS reported that planting of the spring wheat crop is only 9% complete in North Dakota, vs. the average for this time of year of 25%. Planting progress in North Dakota was minimal last week due to a return to cool temperatures and precipitation in the form of both rain and snow, according to the NDWC.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

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Mary Kennedy

Mary Kennedy
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