Soybean basis saw a dramatic drop since last week as a higher cash price of over $15.00 in most of the Midwest enticed farmers to sell old-crop supplies. National average soybean basis of 26 cents over the July futures is 22 cents lower than last week, but 54 cents higher than the DTN five-year average basis at this time. Many processors are still posting cash prices in the mid-$15.00 range, even after the steep drop in basis levels. Lower basis levels were seen along the river heading to the Gulf as most terminals have caught up on late loadings and export demand for soybeans has been flat at this time. The USDA Grain Transportation Report last Thursday stated Mississippi Gulf soybean inspections for the week ending May 9 were down 44% from the previous week and were the lowest since January 1, 2010. U.S soybean plantings are 24% complete vs. 6% last week and vs. 71% at this time last year and the fiver-year average of 42%. Heavy rains moved through the upper Midwest stalling planting progress in North Dakota, Minnesota and Wisconsin.
National average corn basis this week of 33 cents over the July futures is up 1 1/2 cent from last week and is 21 cents higher than the five-year average of the strongest basis level at this time as old-crop supplies remain tight. Corn basis remains firm as end users are unable to secure nearby cash corn while farmers continue planting. USDA reported as of May 19, corn planting was 71% complete vs. 18% last week. While progress in Minnesota rose from 18% planted last week to 70% this week, farmers in southeastern Minnesota received up to 6 inches of rain since Friday, with some farmers reporting they will not get into their fields for at least two weeks to start planting. Ethanol plants continue to post steady to higher basis levels as margins remain positive and ethanol demand is expected to pick up during the summer months. Last Wednesday, EIA reported that while ethanol production for the week ending May 10 was up 1.7% vs. the prior week, ethanol stocks dropped to a 2 1/2 year low.
Hard Red Winter Wheat
National average HRW basis for this week at 23 cents under the July futures is unchanged from last week and is 16 cents higher than the five-year average of the strongest basis at this time. Mill demand has firmed as buyers are seeing little wheat come to market and look for offers to cover nearby needs. Buyers remain concerned that new-crop wheat may be of poor quality and too high in protein in the drought stressed areas. USDA's Monday crop progress report showed a slight decline in HRW conditions from last week with Texas showing 76% of the crop in poor to very poor shape and Oklahoma conditions are 52% poor to very poor. While central Texas has started to harvest and has reported good quality new crop, farmers in north Texas are cutting freeze damaged wheat for hay. Severe weather has continued to move through northern Texas and Oklahoma with high winds and hail causing further damage to the crop. Heading of the U.S. HRW wheat crop was at 43% vs. 29% last week and vs. 80% last year at this time with Kansas behind at 41% headed vs. 100% headed at this time last year.