Market Matters Blog

Hard Red Winter Wheat

National average HRW basis for this week at 29 cents under the May futures is still above the 5-year average of the strongest basis at this time and is unchanged from last week. The cash price has been stronger due to cooler weather and possible freeze damage in parts of the HRW belt. USDA reported Monday that freeze damage was seen in a few counties in Oklahoma, but the severity of the damage is still unknown. Wheat in Oklahoma was 59% jointed, 20 points behind the 5-year average and 32 points behind last year as of April 7. Kansas wheat was 22% jointed, vs. 76% a year ago and Texas shows 14% of their wheat headed vs. 33% last year. There is concern in the market that the return to cooler temperatures and severe weather may cause more damage to the already fragile winter wheat crop. The southern part of the Plains may see temperatures in the teens Wednesday and Thursday which may be harmful to wheat in the jointing stage. Wheat in the jointing stage is susceptible to damage when temperatures reach 24 degrees for 2 hours or longer. In north-central Texas, temperatures in the low 30s and upper 20s may damage the wheat that is heading out. Wheat in the heading stage can sustain damage at 2 hours or more of 30 degree temperatures.

Corn

National average corn basis this week of 6 cents over the May futures is unchanged from last week and continues higher than the 5-year average strongest basis level at this time. With the cash price of corn having dropped 48 cents since the March 28 USDA reports, corn basis has remained firm. Many farmers sold corn prior to the USDA report for delivery ahead of spring fieldwork and are busy moving pre-contracted corn to market before they head to the fields. However, in parts of the Midwest, a spring blizzard is producing 3 to 8 inches or more of snow Tuesday and Wednesday, which will stall farmers from getting into the fields. In northwestern Minnesota and eastern North Dakota, besides the snow, there are reports that the ground is still too cold for any chance of early planting.

Soybeans

National average soybean basis of 4 cents under the May futures is nearly 2 cents higher than last week and continues to move above the 5-year average of the strongest basis at this time. With the cash price of soybeans lower recently, the basis on the interior has been strong this past week. Reports of a new strain of bird flu in China sent the market lower as traders expect soybean product imports to slow due to the outbreak. Cash soybean movement has slowed in the Upper Midwest again this week as a spring snow storm moved from Colorado through South Dakota, central Minnesota and western Wisconsin. Basis levels along the river have firmed as exporters need to move beans south to cover previous export sales. The basis bid in the upper Mississippi in St. Paul was stronger as the first tow made its way into St. Paul early Tuesday morning, thus opening the 2013 shipping season after a nearly 3-week delay.

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