DTN Daily Basis Comments

Monday Morning Basis Update

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
Connect with Mary:

DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was 1 cent weaker at 29 cents under the December futures contract while the DTN National Corn Index was up 3 cents at $3.50. The national average basis for soybeans was 1 cent weaker at 56 cents under the November futures contract while the DTN National Soybean Index was up 15 cents at $9.88. The national average basis for HRW wheat was unchanged at 26 cents under the December futures contract while the DTN National Hard Red Winter Wheat Index was up 17 cents at $4.78. The national average basis for HRS wheat was 1 cent weaker at 36 cents under the December futures contract while the DTN National Hard Red Spring Wheat Index was up 10 cents at $5.16.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.50 $0.03 -$0.29 Dec -$0.003
Soybeans: $9.88 $0.15 -$0.56 Nov -$0.003
SRW Wheat: $5.49 $0.19 -$0.26 Dec -$0.001
HRW Wheat: $4.78 $0.17 -$0.26 Dec $0.002
HRS Wheat: $5.16 $0.10 -$0.36 Dec -$0.001

CORN:

The national average corn basis for Friday is at 29 cents under the December futures, 1 cent weaker than Thursday's basis. December corn closed up 3 1/4 cents at $3.78 1/2 Friday, reaching a new six-month high and for the week gained 10 cents. Another fresh round of export sales Friday morning and strong domestic demand continues to support the cash corn price. The corn market was also riding the wave along with another surge in the soybean and wheat markets. Ethanol plant demand is strong for spot corn, and some plants are taking wet corn and drying it down certain days in order to entice farmers to sell. Some Poet plants have posted information on their websites that wet corn needs to be contracted and discounts will start after 15.5% versus some plants discounting after 15%, while farmers report that some end users have cut moisture discounts in half. Ethanol plant basis is still mixed and some plants are paying higher than posted prices for their spot corn needs. The shuttle basis delivered to the Pacific Northwest remained steady for November forward, with no basis posted for September and October. BNSF secondary shuttle freight remains high with returns and last half September bid at $1,400 per car above tariff and first half October bid at $1,700 per car. Last half October is bid at $1,200 pre car and offered at $1,500. UP secondary shuttle freight is also expensive with last half October bid at $1,000 per car above tariff and offered at $1,400.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

SOYBEANS:

The national average soybean basis for Friday is at 56 cents under the November futures, 1 cent weaker than Thursday's basis. Soybeans continued to rally Friday, with the November up 15 cents, a new two-year high of $10.43 1/2 and for the week gained 47 1/2 cents, a sixth straight week of weekly gains. True to form recently, the USDA posted another large export sale announcement noting that private exporters sold 132,000 metric tons (mt)of soybeans for delivery to China during the 2020-21 marketing year and 100,000 mt of soybean meal for delivery to unknown destinations during the 2020-21 marketing year. Soybean meal also had a good day, with the December futures up $6.20 and reaching a new two year high of $342.10. Crush margins have been strong in the U.S., giving processors more incentive to keep crushing soybeans. Soybean basis remains strong for this time of year when normally we would be near lower harvest values. Even areas in North Dakota are seeing basis levels as much as 60 cents stronger than normal for this time of year. However, the track PNW basis did finally take a breather, with September basis 10 cents weaker and November 5 cents weaker.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Friday is at 26 cents under the December futures, unchanged from Thursday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Friday is at 26 cents under the Kansas City December futures, unchanged from Thursday's basis. The KC December futures were sharply higher Friday, up 16 3/4 cents, and for the week gained 33 cents. While the rally was partially due to the strength in the soybeans, the market is finding support from a good tender lineup showing that global wheat demand is solid right now. The market is also showing concern over the latest NWS drought outlook expecting drought to expand into the southern Plains and Mississippi Delta from mid-September through December. USDA said in the Sept. 14 crop progress report that the U.S. was only 5% planted, with Kansas not showing any progress yet, but that will likely change in the upcoming report on Sept. 21.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Friday is at 36 cents under the Minneapolis December futures, 1 cent weaker than Thursday's basis. The Minneapolis spot spring wheat cash market closed as follows, basis the Minneapolis December futures contract for No. 1 milling quality: 12% proteins were unchanged at +85N; 13% proteins were at +110; 13.5% proteins were at +130 to +145; 14% proteins were down 15 cents to up 5 cents at +135 to +155*; 14.5% proteins were at +150*; 15% proteins were down 10 cents at +165*. Receipts were 192 cars, which included 5 trains*. (Bid=B Ask=A Nominal=N) Wheat on the MGEX floor is traded delivered Chicago/beyond.

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

Follow her on Twitter @MaryCKenn

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Mary Kennedy

Mary Kennedy
Connect with Mary: