DTN Daily Basis Comments

Wednesday Morning Basis Comments

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was 1 cent stronger at 17 cents under the December futures contract while the DTN National Corn Index was up 5 cents at $4.03. The national average basis for soybeans was unchanged at 51 cents under the January futures contract while the DTN National Soybean Index was up 17 cents at $11.19. The national average basis for HRW wheat was 1 cent stronger at 25 cents under the December futures contract while the DTN National Hard Red Winter Wheat Index was down 5 cents at $5.27. The national average basis for HRS wheat was 1 cent stronger at 24 cents under the December futures contract while the DTN National Hard Red Spring Wheat Index was down 5 cents at $5.25.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $4.03 $0.05 -$0.17 Dec $0.007
Soybeans: $11.19 $0.17 -$0.51 Jan $0.005
SRW Wheat: $5.70 -$0.01 -$0.26 Dec $0.021
HRW Wheat: $5.27 -$0.05 -$0.25 Dec $0.003
HRS Wheat: $5.25 -$0.05 -$0.24 Dec $0.005

CORN:

The national average corn basis for Tuesday is at 17 cents under the December futures, 1 cent stronger than Monday's basis. December corn closed up 4 cents as the U.S. remains the best origin for corn right now given the low supplies in Brazil, but we certainly aren't flush with stocks either. Early Tuesday the USDA reported private exporters sold 195,000 metric tons (mt) of corn for delivery to Mexico during the 2020-21 marketing year. There is still chatter among traders that we may see China come back for more U.S. corn, but nothing has been confirmed. The U.S. 2020 corn harvest is nearly done at 95% and ahead of schedule for many states, but final yields in parts of the Upper Midwest haven't been as good as expectations, especially in parts of the Dakotas and northwest Minnesota. The track PNW and CIF NOLA basis was steady nearby, with deferred basis at a 5-cent carry. River basis is strong right now on much of the river system, especially on the Upper Mississippi. Nearby BNSF secondary shuttle freight has now moved to “unders” with BNSF December freight bid at $100 per car under tariff and offered at $200 per car over tariff, while January freight is still firm and bid at $300 per car above tariff and offered at $500. UP secondary freight for December is bid at $100 per car under tariff and offered at $100 over.

SOYBEANS:

The national average soybean basis for Tuesday is at 51 cents under the January futures, unchanged from Monday's basis. January soybean futures closed up 16 1/4 cents, hitting their highest price since June 2016. The market is still finding support from the strong October crush reported by NOPA and a large export deck so far in this crop year. With supplies becoming tight in the U.S., all eyes are on the current weather in South America where the current seven-day forecast calls for moderate rain amounts in central Brazil, but only light amounts for southern Brazil and Argentina which are the two areas where dry conditions are the biggest concern. December soybean meal was up $6.50 and soybean oil closed up 9 cents after reaching a new high in the session. Soybean oil came under some pressure from lower Malaysian palm oil futures and underlying weakness in U.S. crude oil futures. The track PNW basis was 5 cents weaker for December and January at +115F. CIF NOLA basis was 4 cents stronger for last half November and St. Louis basis was 17 cents stronger. Barge freight continues to slide as more empties become available and are moving northbound as river levels have risen from recent rains. Basis along parts of the Illinois, Ohio and Mississippi Rivers is stronger after the barge freight market backed off and logistics have improved.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Tuesday is at 26 cents under the December futures, 2 cents stronger than Monday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Tuesday is at 25 cents under the Kansas City December futures, 1 cent stronger than Monday's basis. The KC December was down 5 1/2 cents Tuesday, unable to find any fresh news to give it a boost. There are a few tenders in the works from regular U.S. customers but that's about it. The plus side of the market is the KC spot premiums which were stronger as cars finally showed up for sale and fell into the hands of needy mills. The premium for 11.4% protein through 11.8% was 7 cents stronger and 12% through 14% was 6 cents stronger. Flour demand is strong and will remain that way as we head into the holiday baking season.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Tuesday is at 24 cents under the Minneapolis December futures, 1 cent stronger than Monday'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 not quoted; 13% proteins were unchanged not quoted; 13.5% proteins were unchanged at +135N; 14% proteins were down 5 cents at +125* to +135*; 14.5% proteins were up 20 cents to up 5 cents at +120*; 15% proteins were up 15 cents to down 25 cents at +135*. Receipts were 130 cars, which included five 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

Mary Kennedy

Mary Kennedy
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