DTN Daily Basis Comments

Friday Morning Basis Update

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
Connect with Mary:

DAILY BASIS AND CASH INDEX SUMMARY:

The national average basis for corn was unchanged at 9 cents over the July futures contract while the DTN National Corn Index was up 8 cents at $7.08. The national average basis for soybeans was 2 cents stronger at 26 cents under the July futures contract while the DTN National Soybean Index was down 17 cents at $15.18. The national average basis for HRW wheat was 1 cent stronger at 15 cents under the July futures contract while the DTN National Hard Red Winter Wheat Index was up 5 cents at $6.25. The national average basis for HRS wheat was 1 cent stronger at 30 cents under the July futures contract while the DTN National Hard Red Spring Wheat Index was up 12 cents at $7.45.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $7.08 $0.08 $0.09 Jul -$0.004
Soybeans: $15.18 -$0.17 -$0.26 Jul $0.019
SRW Wheat: $6.64 $0.02 -$0.20 Jul $0.001
HRW Wheat: $6.25 $0.05 -$0.15 Jul $0.008
HRS Wheat: $7.45 $0.12 -$0.30 Jul $0.006

CORN:

The national average corn basis for Thursday is at 9 cents over the July futures, unchanged from Wednesday's basis. July corn closed up 8 1/4 cents as the weekly drought monitor showed drought worsening along the northern Corn Belt. Just in Minnesota alone, records were broken for what is now 10 consecutive days of about 90-degree heat and the only rain has been a few clusters of pop-up showers. Southern Minnesota may see one tonight, but the corn and soybeans especially in southwest Minnesota, northwest Iowa and southeast South Dakota are in desperate need of a drink. Corn moved up 18 cents after Thursday's USDA report proved to be bullish for corn. USDA reduced its estimate of old-crop U.S. ending stocks from 1.257 billion bushels (bb) to 1.107 bb, lower than expected. USDA estimated a 75-million-bushel (mb) increase in corn use for ethanol and a 75 mb increase in the export estimate. As for the Brazil corn production number, USDA estimated it at 98.5 million metric tons (mmt), down from 102.0 mmt in May, but the market expected lower given that many private estimates are below that with latest coming from CONAB at 96.4 mmt. July corn traded in a wide range Thursday of 29 3/4 cents between low and high. There is no change to the track Pacific Northwest corn basis and secondary shuttle freight remains unchanged. Ethanol plants continue to be the driver for basis right now and even though they have weakened their basis levels in the past month, they continue to take in cash corn either new sales or precontracted. Many buyers are starting to move basis to the September with the steep inverse from July to September a motivation to do so.

SOYBEANS:

The national average soybean basis for Thursday is at 26 cents under the July futures, 2 cents stronger than Wednesday's basis. July soybeans closed down 18 1/2 cents thanks to a bearish USDA report Thursday. USDA increased its estimates of ending stocks by small amounts for both old-crop and new-crop soybeans. A 15-mb reduction in the crush estimate for 2020-21 increased ending stocks from 120 mb to 135 mb and also lifted the new-crop estimate to 155 mb. July soybean meal was down $4.80, closing at a six-month low and July soybean oil was down 1.12 cents, while deferred month September forward were higher. Weather remains a concern for the market as the seven-day forecast remains dry for most of the Corn Belt with hot temperatures in western growing areas. Thursday's U.S. Drought Monitor showed worsening drought conditions expanded in the Upper Midwest where it has been sweltering hot and dry for over a week. Track St. Louis basis was 4 cents weaker, while river basis continues to fade. Once again, the barge freight market is slow as demand has faded. Current river conditions are good, which means barges are getting to the Gulf and turning back upriver empty without any issues.

SOFT RED WINTER WHEAT:

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

HARD RED WINTER WHEAT:

The national average HRW wheat basis for Thursday is at 15 cents under the Kansas City July futures, 1 cent stronger than Wednesday's basis. July KC futures closed up 4 1/2 cents following the higher spring wheat futures on the day. The market was taken by surprise when the USDA increased Russian production to 86 million metric tons as the market was looking for a reduction. The watch is on for new-crop winter wheat harvest and there have been reports that there are good yields so far in Oklahoma. Given the lack of U.S. exports, if we have a decent crop, the mills will take the higher protein and the rest will likely be fed.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Thursday is at 31 cents under the Minneapolis July futures, 1 cent stronger than Wednesday'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 down 15 cents to unchanged at +85* to +114N, 14% proteins were unchanged at +95N to +130; 14.5% proteins were up 10 cents at +115 and 15% proteins were unchanged at +100N to +165. Receipts were 51 cars, which included 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
Connect with Mary: