Thursday Morning Basis Update

Corn Basis Steady; Soybean Basis Stronger

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 unchanged at 17 cents under the December futures contract while the DTN National Corn Index was up 6 cents at $4.09. The national average basis for soybeans was 1 cent stronger at 50 cents under the January futures contract while the DTN National Soybean Index was up 6 cents at $11.26. The national average basis for HRW wheat was 1 cent weaker at 26 cents under the December futures contract while the DTN National Hard Red Winter Wheat Index was up 5 cents at $5.32. The national average basis for HRS wheat was unchanged at 24 cents under the December futures contract while the DTN National Hard Red Spring Wheat Index was up 2 cents at $5.26.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $4.09 $0.06 -$0.17 Dec $0.005
Soybeans: $11.26 $0.06 -$0.50 Jan $0.004
SRW Wheat: $5.71 $0.02 -$0.26 Dec -$0.007
HRW Wheat: $5.32 $0.05 -$0.26 Dec -$0.005
HRS Wheat: $5.26 $0.02 -$0.24 Dec $0.002

CORN:

The national average corn basis for Wednesday is at 17 cents under the December futures, unchanged from Tuesday's basis. December corn closed up 5 1/2 cents with strength from the higher soybean market and another fresh export sale. USDA announced private exporters sold 140,000 metric tons (mt) of corn for delivery to unknown destinations during the 2020-21 marketing year. The EIA report Wednesday was not great for corn demand in the long run if ethanol inventories rise and demand falls. The only bright side is that plant coproducts and byproducts prices are rising such as DDG, CO2 and corn oil as there is good demand for all those products and with lower production, that means there is less of them to go around. Plant margins rely on coproducts and byproducts, especially DDG, which accounts for about 25% of plant margins. The track PNW basis was steady, while delivered St. Louis rail basis was 8 cents stronger. BNSF secondary shuttle freight for November is having a liquidation sale with bids at $400 per car under tariff against offers of $200 under. December is bid at $50 per car under tariff against offers of $200 over tariff. Ethanol plant basis is still firm and overall basis remains strong throughout much of the Midwest.

SOYBEANS:

The national average soybean basis for Wednesday is at 50 cents under the January futures, 1 cent stronger than Tuesday's basis. January soybeans closed up 6 cents making a new high and getting help from a strong December soybean oil close, which was up 96 cents and the highest close in almost 6 years. South American weather is still a leading factor in the soybean strength and the current seven-day forecast is still showing only light rain amounts for southern Brazil and Argentina. The rest of the story remains the same in that U.S. ending stocks are tightening given the large amount of sales to China and the continued strength in the crush. The track Pacific Northwest shuttle basis was steady, while St. Louis basis was 10 cents stronger along with stronger river bids in the Upper Mississippi and Illinois Rivers. While traffic had gotten better in the Lower Mississippi, there is still a slow recovery to get barges northbound to waiting shippers. Barge freight has gotten cheaper, another factor in higher basis.

SOFT RED WINTER WHEAT:

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

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Wednesday is at 26 cents under the Kansas City December futures, 1 cent weaker than Tuesday's basis. The KC December futures were up 5 1/4 cents thanks to help from the rise in the corn market. The market also saw support from the dry conditions currently seen in the Southern Plains, and while it is still too early to panic, some of those growing areas have not recovered from drought. The best news for the HRW winter market is that mills are still supporting the KC spot basis as demand continues to grow.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Wednesday is at 24 cents under the Minneapolis December futures, unchanged from Tuesday'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 15 cents to up 15 cents at +110 to +145; 14.5% proteins were unchanged at +120N; 15% proteins were up 5 cents to up 25 cents at +140 to +160. Receipts were 54 cars, which included one train.* (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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