BargeOnRiver Ron Chapple Stock/ThinkstockPhotos
Aerial of barge on Mississippi River in Baton Rouge, Louisiana.

Basis Outlook - Farmer sales weaken corn basis

Upper Mississippi River closes again, lifting bids to the south

Get ready for the great grain rush of 2019. This year’s historic closing of the Upper Mississippi River leaves exporters with 100 pounds of corn, soybeans and wheat to fit into a 10-pound bag.

Hundreds of barges are waiting for the river to reopen. Just when that will be remains a day-to-day proposition. And in any case, the river is likely to look more like the Dan Ryan expressway at rush hour in Chicago than the Indy 500. Water levels down river to the Gulf won’t recede quickly, limiting traffic in some cases to daylight hours while tugs reduce the number of barges they can tow.

Water levels over the weekend dropped enough to allow opening of locks north of Quincy, Illinois. Most of the traffic is headed upriver, suggesting barges that will need to be loaded. That demand helped firm corn and soybean basis on much of the river system. Soybeans benefited the most due to the record book of unshipped export sales needing fulfillment, including 233 million purchased by China after the brief thaw in the trade war with the U.S.

Most of the river system still open for business, including the Lower Mississippi and Ohio River continued to see sharp gains, A few rail bids on parts of the Plains headed west were also stronger thanks to firm basis off the Pacific Northwest. But much of the western part of the growing region saw steady to weaker basis as western processors eased. Plants pushed bids sharply in the eastern Midwest, where farmers face more delays planting soybeans, raising concerns about lower acreage and yields.

Average soybean basis firmed round two cents, though it remains much weaker than average headed into July delivery.

Corn basis held firm Friday despite the surge to new contract highs, though overall last week it was steady to a little weaker on the rally. Ethanol plants raised bids despite weaker margins as production rose and stocks fell. Basis also firmed at rail terminals headed to the PNW.

But basis was weaker in much of the western Corn Belt, especially in areas with heavy livestock stock concentration as corn may lose space in feed bunkers to competitively price hard red winter wheat. The exception to that trend came in Texas, where wheat was also bid higher.

With a big HRW crop coming, basis for that class was generally weaker, though hard wheat bids generally were stronger in areas headed to the PNW export market. Soft red winter wheat cash continues to firm with production estimates falling due to wet conditions in the eastern Midwest.

Sorghum basis was weaker, with export business limited and competition from wheat increasing.

 

The interactive maps below show how basis fared around the country. Click the box in the upper left-hand corner of the map to bring up the legend, and to turn features show on or off.
 

 

Download a complete version of the outlook with extensive charts and analysis using the Download button at the end of this report. 

Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.

For more corn, wheat and soy news, commodity marketing recommendations and daily commodity charts, subscribe to Farm Futures' free e-newsletter, Farm Futures Daily, and keep up during the day with Farm Futures on Twitter.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish