A long, cold winter has its benefits. Corn and soybean futures are on a roll, and the prospect of better prices appears to be luring more grain to town, no matter what the difficulty.
Nearby corn basis could have been expected to weak anyway, with March selling for a discount to May as it prepares to go off the board at the end of next week. But basis weakened more, reflecting farmers' willingness to open bins after betting correctly on stronger prices. Average basis levels in the western Corn Belt were around 11 cents weaker this week, around 4 cents weaker than the March-May spread.
But corn basis feeding the export pipeline just matched the roll, despite unexpected deliveries this week against March. That corn was in Burns Harbor, IN, out of position for the export market until navigation starts up again on the Great Lakes.
Ice remains a problem on the river system where barges along the Illinois River are selling at a big premium to average levels. Still, water levels at St. Louis were above levels that can cause shipping restrictions, and shipments through Lock & Dam 27 at Granite City north of St. Louis picked up appreciably this week.
Corn shipments out of the Gulf are also on a rise, after a slow start during the first half of the marketing year. Every nook and cranny of shipping capacity was diverted to processing record soybean shipments, which still remain strong this week. That helped soybean basis hold up, not surprising since May trades at a discount to March, though the premium is fading after a few deliveries this week.
Wheat basis remains very mixed. Spring wheat basis strengthened on the roll, though protein premiums off the PNW weakened by a dime. White wheat basis remains erratic, with uncertain output in Australia. Soft red winter wheat basis was generally weaker, with reductions in net export sales seen the last two weeks.
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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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