With cash corn price near break-even levels and wheat stagnant, soybeans are the bright spot for farmers headed into December. And $13 cash is convincing plenty of growers to sell soybeans first, weakening the basis in many locations over the past week.
Bids were softest to the west and north. Beans are definitely the crop of choice to sell in the west, where corn bids weakened, discouraging movement. On northern stretches of the river system buyers are backing away from the market at many terminals, getting ready for winter closing. Ice is starting to form at some locks and little traffic was reported north of Lock and Dam No. 8 at Genoa, Wis., south of Lacrosse. Soybean basis was better along the Ohio River, surging more than 25 cents this week on cheaper barge freight rates. Late harvest and problems getting barges up river caused basis to be very weak early in the month on the Ohio.
Total traffic on the river system is a little slower than average, but more corn is moving now that the peak of the soybean season is past. That helped spur some bids to attract sales in parts of the eastern Corn Belt, though basis on the river system overall eased a little this week. Still, there were no deliveries Friday on first notice day for December futures, with nothing registered for delivery at locations where corn can be put out. Those terminals are centered along the Illinois River, which typically stays open all winter, barring shipping disruptions like those caused by the 2012 drought a year ago.
Water levels at St. Louis are dropping, which could slow traffic due to lighter loads, but no major stoppages are anticipated so far.
Basis for soft red winter wheat reflected location. Bids soared in the export pipeline, thanks to strong sales and ideas U.S. prices are more competitive on world markets. More sales to China, where futures hit record levels in November, are also possible. But in Toledo, basis remains below option, because the grain is out of position for the export market. A lot of wheat was registered for delivery this week, and 1,210 lots were put out on first notice day, all in Ohio.
Supplies of hard red winter wheat are tightening, keeping basis strong, though bids have flattened out. Spring wheat basis moved higher this week as protein premiums gained another dime off the PNW. There were no deliveries in Minneapolis, because the protect content of this year’s crop in the U.S. and Canada was lower than normal.
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Senior Editor 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 Adviser. 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.
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