DTN Daily Basis Comments

Corn Basis Weaker

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 2 cents weaker at 9 cents over the July futures contract while the DTN National Corn Index was up 10 cents at $7.00. The national average basis for soybeans was unchanged at 28 cents under the July futures contract while the DTN National Soybean Index was down 18 cents at $15.34. The national average basis for HRW wheat was 1 cent weaker at 16 cents under the July futures contract while the DTN National Hard Red Winter Wheat Index was up 3 cents at $6.20. The national average basis for HRS wheat was 1 cent weaker at 31 cents under the July futures contract while the DTN National Hard Red Spring Wheat Index was down 7 cents at $7.33.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $7.00 $0.10 $0.09 Jul -$0.011
Soybeans: $15.34 -$0.18 -$0.28 Jul -$0.002
SRW Wheat: $6.63 -$0.02 -$0.20 Jul $0.003
HRW Wheat: $6.20 $0.03 -$0.16 Jul -$0.004
HRS Wheat: $7.33 -$0.07 -$0.31 Jul -$0.005

CORN:

The national average corn basis for Wednesday is at 9 cents over the July futures, 2 cents weaker than Tuesday's basis. July corn led the corn complex Wednesday, closing up 10 3/4 cents. The market focused on the tight old-crop supplies and the ongoing concern for Brazil's drought-stricken second corn crop. It will be interesting to see if USDA drops Brazil production estimates from 120 million metric tons (mmt) in Thursday's report given that many private estimates have already come in below 90 mmt. Corn demand is still in the hands of ethanol plants and Wednesday's EIA report confirmed that as plant production last week rose to a 15-week high. Plant margins are not as strong as they were in May but remain good for plants and are still above recent averages for the time of year. Basis at ethanol plants was steady with some plants posting weaker basis where they had precontracted corn delivery for this month. Track Pacific Northwest basis was flat for September forward and track St. Louis was steady. BNSF secondary shuttle freight is still bid and offered under tariff through first half September. October freight has come off recent highs and is bid $500 per car over tariff against offers of $1,000 over. O/N/D packages are at $300 over against $500 over.

SOYBEANS:

The national average soybean basis for Wednesday is at 28 cents under the July futures, unchanged from Tuesday's basis. July soybeans were down 17 1/2 cents, reaching a fresh low for the week. After a strong showing early in the week, July soybean oil closed down 0.49 cent, with pressure seen in Malaysian palm oil futures, closing down 4.4%. The seven-day forecast still looks mostly dry for much of the central and western Midwest, and the extreme heat is till going to hang around for a few more days in the west. On the flip side, excessive rains are soaking Ohio, as Arkansas and Mississippi are overwhelmed, with social media showing pictures of flooded fields and roads. Track St. Louis basis was 5 cents weaker, while CIF NOLA basis was 11 cents weaker. Barge freight is still dead, and demand has dried up for the next few months, hence river basis has been weak. Many processors have moved basis bids to August, while some have already started posting bids basis the November futures.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Wednesday is at 20 cents under the July futures, unchanged from Tuesday's basis.

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Wednesday is at 16 cents under the Kansas City July futures, 1 cent weaker than Tuesday's basis. The KC July closed up 3 1/4 cents as the market took profits on the day. Premiums continue to be firm with steady mill demand for higher protein rail cars. Texas Gulf basis was 5 cents weaker as exports of HRW wheat from the U.S. are elusive right now.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Wednesday is at 31 cents under the Minneapolis July futures, 1 cent weaker than Tuesday's basis. The Minneapolis spot spring wheat cash market closed as follows, basis the Minneapolis July futures contract for No. 1 milling quality: 12% proteins were not quoted, 13% proteins were not quoted, 13.5% proteins were +100B* to +114, 14% proteins were down 10 cents to unchanged at +95* to +130; 14.5% proteins were down 10 cents at +105 and 15% proteins were unchanged at +100N to +165. Receipts were 67 cars, which included 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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