DTN Daily Basis Comments

Soybean 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 unchanged at 7 cents over the July futures contract while the DTN National Corn Index was down 40 cents at $6.40. The national average basis for soybeans was 3 cents weaker at 38 cents under the July futures contract while the DTN National Soybean Index was down $1.21 at $12.92. The national average basis for HRW wheat was unchanged at 15 cents under the July futures contract while the DTN National Hard Red Winter Wheat Index was down 25 cents at $5.71. The national average basis for HRS wheat was unchanged at 31 cents under the July futures contract while the DTN National Hard Red Spring Wheat Index was down 9 cents at $7.20.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $6.40 -$0.40 $0.07 Jul -$0.003
Soybeans: $12.92 -$1.21 -$0.38 Jul -$0.027
SRW Wheat: $6.16 -$0.24 -$0.23 Jul -$0.003
HRW Wheat: $5.71 -$0.25 -$0.15 Jul $0.004
HRS Wheat: $7.20 -$0.09 -$0.31 Jul $0.001

CORN:

The national average corn basis for Thursday is at 7 cents over the July futures, unchanged from Wednesday's basis. It was a blood bath Thursday as nearby July corn through the July 2022 contract closed down the 40-cent limit Thursday, and that wasn't the only disaster story. The markets turned sharply lower as the U.S. dollar made a new two-month high Thursday. The corn market and soybean oil has been dropping since news surfaced that refiners may be given a lower blending mandate, with the White House announcing they will release preliminary 2021 and 2022 RFS blending mandates in July. This news has pulled 2021 D6 RINs, 2020 D6 RINs and 2021 biomass diesel D4 RINs to new three-month lows the past week, in turn adding severe pressure on corn and soybean oil. Weekly export sales and shipments showed that corn shipments remain well on track, but new export sales of corn are low. Track St. Louis basis was 7 cents weaker for June and 1 cent weaker for July, while CIF NOLA basis was 3 cents weaker for June and 1 cent weaker for July. River basis is weaker again and, in the Gulf, barge lines are watching the progress of Invest 92-L/potential Tropical Storm Claudette that could arrive in the Gulf in the next 48 hours.

SOYBEANS:

The national average soybean basis for Thursday is at 38 cents under the July futures, 3 cents weaker than Wednesday's basis. The soybean complex on Thursday completely fell apart as panic selling engulfed the market. July soybeans closed down $1.18 3/4, while November soybeans closed down 90 1/2 cents. Soybean meal closed down $17.70, but the worst of the day was soybean oil closing limit down, with July down 56.57 and the contracts through January 2022 closing limit down as well. The possibility of a change in renewable volume obligations for 2021 and 2022 is still a dark clous over the biofuels market, with RINs closing at $1.46 Thursday, over 50 cents cheaper than one week ago. Soybean basis Thursday night was steady in the domestic market and even slightly higher in some spots. CIF NOLA basis was 2 cents stronger for June and July and track St. Louis was 2 cents stronger. The steep losses in the cash price thanks to the futures added support to basis levels Thursday.

SOFT RED WINTER WHEAT:

The national average SRW wheat basis for Thursday is at 23 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, unchanged from Wednesday's basis. KC July closed down 25 1/2 cents, pretty much following the sharp losses in corn and soybeans Thursday. Adding pressure was the higher U.S. dollar and the increase in harvest as combines start to roll in Kansas. Dismal weekly exports reported Thursday were not helpful at all, showing just how poor export demand is for U.S. winter wheat. Expect winter wheat to remain a favorite in feed rations and while reports of quality are good so far, proteins in the 8% to 11% range is making mills nervous, especially given the poor prospects for a decent spring wheat crop.

HARD RED SPRING WHEAT:

The national average HRS wheat basis for Thursday is at 31 cents under the Minneapolis July futures, unchanged from 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 not quoted, 14% proteins were unchanged at +130N; 14.5% proteins were unchanged at +100N and 15% proteins were unchanged at +165N. Receipts were 30 cars, which included one train(s).* (Bid=B Ask=A Nominal=N) Wheat on the MGEX floor is traded delivered Chicago/beyond. NOTE: The train on the spot was a #2 grade 11% protein non-milling HRW winter wheat that traded at +160 basis Minneapolis July futures and the other cars were low falling number 15% non-milling that traded at +70N.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

Mary Kennedy

Mary Kennedy
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