DTN Daily Basis Comments

Monday Morning Basis Update

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 15 cents under the March futures contract while the DTN National Corn Index was up 2 cents at $4.81. The national average basis for soybeans was unchanged at 43 cents under the March futures contract while the DTN National Soybean Index was up 19 cents at $13.31. The national average basis for HRW wheat was unchanged at 26 cents under the March futures contract while the DTN National Hard Red Winter Wheat Index was down 4 cents at $5.69. The national average basis for HRS wheat was 1 cent weaker at 26 cents under the March futures contract and the DTN National Hard Red Spring Wheat Index was up 4 cents at $5.82.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $4.81 $0.02 -$0.15 Mar -$0.004
Soybeans: $13.31 $0.19 -$0.43 Mar -$0.008
SRW Wheat: $6.22 -$0.06 -$0.17 Mar -$0.023
HRW Wheat: $5.69 -$0.04 -$0.26 Mar $0.000
HRS Wheat: $5.82 $0.04 -$0.26 Mar -$0.001

CORN:

The national average corn basis for Friday is at 15 cents under the March futures, unchanged from Thursday's basis. March corn was higher to end the first week of the New year, closing up 2 1/4 cents and notching a 12 1/4 cent gain for the week, earning the title "Corn is King," especially when you look at the high cash price. On the flip side of that, ethanol plant margins are said to be lower than they normally are at this time of year historically. Chalk it up to sharply higher cash corn costs and higher energy costs despite surging DDG prices which are due to tight supplies but are only about 25% of the margin equation. Plants still need corn to keep the plants running and if farmers won't sell cash -- and many won't -- then there are other incentives like free price later. That gets corn out of the bin for a farmer without him having to price it for now and can be helpful given the fluctuating outdoor temps so far this winter. Track PNW basis was steady for January and February basis was 5 cents stronger, while track St. Louis was 1 cent weaker. BNSF secondary shuttle freight for February has spiked again with bids at $450 per car above tariff against offers of $700 over. Last-half January bids are $200 per car over tariff against offers of $350 over.

SOYBEANS:

The national average soybean basis for Friday is at 43 cents under the March futures, unchanged from Thursday's basis. March soybeans were the true star of the week, closing up 19 1/2 cents and notching a very impressive gain of 63 3/4 cents for the week. Traders are preparing for the Jan. 12 USDA/WASDE with expectations production and ending stocks figures will be lower than the prior report. The underlying support for this market is still coming from uncertainty over South American weather's impact on the new crop and knowledge that U.S. soybean stocks are getting tight. Meanwhile, crush margins remain strong, as evidenced in the most recent USDA Fats and Oils report which showed the November crush at 191 million bushels (mb) and the largest November crush on record. The demand for soybeans is on the export side as well as the crush side and that is keeping soybeans at current high levels. For the first week of 2021, the DTN National Soybean Index gained 59 cents. The track PNW shuttle basis was unchanged at +100H for January and first-half February, with no bids posted after that for now. Track St. Louis basis and CIF NOLA basis was also steady. Barge freight has been quiet with most activity on the Illinois River ahead of the forecast for colder temps. River levels remain low at St. Louis at 2.8 feet above zero gauge with current forecast showing the river there dipping below zero gauge by Jan. 24.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Friday is at 17 cents under the March futures, 3 cents weaker than Thursday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Friday is at 26 cents under the Kansas City March futures, unchanged from Thursday's basis. KC March futures were down 3 3/4 cents Friday and for the week posted a loss of 8 3/4 cents as there was no news to give the market a boost. Even a strong corn market didn't help, which seems futile given wheat is a cheaper feed alternative already. The KC milling protein premiums were up 6 cents for ords, but the rest of the proteins moved lower down 5 to 9 cents between 11.4% through 12.8%. The Texas Gulf basis remains firm given there is no new export business, but traders are thinking we may be seeing some fresh Brazil business soon.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Friday is at 26 cents under the Minneapolis March futures, unchanged from Thursday's basis. The Minneapolis spot spring wheat cash market closed as follows, basis the Minneapolis March futures contract for No. 1 milling quality: 12% proteins were not quoted; 13% proteins were not quoted; 13.5% proteins were unchanged at +110N; 14% proteins were up 10 cents to unchanged at +130; 14.5% proteins were down 10 cents to unchanged +100* to +110; 15% proteins were unchanged at +120N to +150N. Receipts were 47 cars, which includes one train(s). (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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