DTN Daily Basis Comments

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 17 cents under the March futures contract while the DTN National Corn Index was up 7 cents at $5.24. The national average basis for soybeans was 1 cent weaker at 43 cents under the March futures contract while the DTN National Soybean Index was up 13 cents at $13.25. The national average basis for HRW wheat was 1 cent stronger at 25 cents under the March futures contract while the DTN National Hard Red Winter Wheat Index was down 3 cents at $5.86. The national average basis for HRS wheat was 1 cent weaker at 28 cents under the March futures contract while the DTN National Hard Red Spring Wheat Index was down 3 cents at $5.89.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $5.24 $0.07 -$0.17 Mar $0.003
Soybeans: $13.25 $0.13 -$0.43 Mar -$0.005
SRW Wheat: $6.16 -$0.02 -$0.17 Mar $0.000
HRW Wheat: $5.86 -$0.03 -$0.25 Mar $0.003
HRS Wheat: $5.89 -$0.03 -$0.28 Mar -$0.002

CORN:

The national average corn basis for Thursday is at 17 cents under the March futures, unchanged from Wednesday's basis. March corn closed up 6 1/2 cents after a dismal close midweek. Support came from weekly export sales and shipments showed that as of the week ended Feb. 4, total export commitments in 2020-21 are up 142%. With China on holiday, export sales may slow, but Mexico, South Korea and Japan may come in and buy more U.S. corn. Domestic demand is going to be affected by the extreme cold and snow as logistics will suffer on rail and barge. Ethanol plants in the Midwest will struggle with the frigid temperatures across the Midwest and this will likely slow production. Track St. Louis basis was 6 cents weaker and CIF NOLA basis was steady. Track PNW basis is unchanged and stagnant, while secondary shuttle freight is unchanged. BNSF reported on their website that they are confronting service challenges in multiple areas of their network due to extreme winter operating conditions. https://www.bnsf.com/…

SOYBEANS:

The national average soybean basis for Thursday is at 43 cents under the March futures, 1 cent weaker than Wednesday's basis. March soybeans closed up 13 1/2 cents Thursday after a sharply lower close midweek, finding support from a bullish weekly export inspection report. USDA reported an increase of soybean export sales for 2020-21 and an increase in export shipments for the week ended Feb. 4. Total soybean export commitments are now up 81% versus one year ago. Earlier Thursday, Brazil's crop agency, Conab, estimated the soybean crop at 133.8 million metric tons (mmt) or 4.92 billion bushels (bb), which would be a new record high, if true. The Buenos Aires Grain Exchange said Thursday 8% of Argentina's soybean crop was rated poor or very poor, versus 9% the previous week. March soybean meal was up $6.60, while March soybean oil was down 6 cents, under pressure from the weakness in the crude oil market Thursday. Track PNW still shows no basis bid for nearby, while track St. Louis was 1 cent stronger. CIF GULF basis was 1 cent weaker as conditions in the Gulf have been challenging due to dense fog, which may lead to extensive delays to transit, fleet operations, and general marine activity over this timeframe, according to American Commercial Barge Line. In addition, icing on the Illinois River has stalled barges from moving down to the Mississippi River.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Thursday is at 17 cents under the March futures, unchanged from Wednesday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Thursday is at 25 cents under the Kansas City March futures, 1 cent stronger than Wednesday's basis. March KC wheat closed down 3 cents after trading higher early thanks to decent export sales. U.S. exports out of the Gulf are going to be challenging due to the increase in ocean freight rates thanks to the corn and soybeans demand so expect the Pacific Northwest (PNW) to carry the ball for now. The market has one eye on the central U.S. Plains where the coldest temperatures of the winter, along with subfreezing readings as far south as central Texas, may cause some winterkill where there is no snow cover. It's still too early to panic, but on top that, the extreme drought hangs on in the western edge of the southwestern U.S. Plains.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Thursday is at 28 cents under the Minneapolis March futures, 1 cent weaker than Wednesday'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 unchanged at +105N; 13.5% proteins were up 15 cents to unchanged at +120, 14% proteins were up 10 cents to unchanged at +105 to +120, 14.5% proteins were down 10 cents to up 5 cents at +90 to +105 and 15% proteins were unchanged to down 20 cents at +120* to +130. Receipts were 94 cars, which includes two 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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