Home / Markets / Markets Analysis / Cash basis volatility continues

Cash basis volatility continues

Agriculture.com Staff 03/25/2008 @ 12:51pm

Grain prices continued there unprecedented volatility this past week. The holiday-shortened week was met with selling pressure across the board, but trading for the start of this week has been positive and recouped much of the losses from last week.

Basis levels at the Gulf were up sharply the past week. Corn basis was up 12 cents a bushel over the previous week, while soybean basis levels improved 25 cents. U.S. levels showed improvement as well. Average spot basis bids for corn were up 2.5 cents a bushel while soybean basis improved 5 cents on average across the U.S.

Most of the strength in basis was tied to gains around key river terminals. Along the Ohio River, basis bids around the Evansville, Indiana, region were up 8 cents for corn and 14 cents for soybeans. Some of the strength was due to weaker barge rates, which fell 5 to 10 cents a bushel over the past week along the river barge system. However, barge rates could start to move higher and could put some downward pressure on basis levels.

Continue to expect volatility in the basis as futures markets search for equilibrium. Basis levels should find additional strength as farmers head to the fields, although wet conditions will like post-pone that event for later than normal.

Grain prices continued there unprecedented volatility this past week. The holiday-shortened week was met with selling pressure across the board, but trading for the start of this week has been positive and recouped much of the losses from last week.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Cool Tools Christmas Edition: Craftsman Two-in-One