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Corn basis moved slightly higher this week

Agriculture.com Staff 02/10/2016 @ 2:03pm

Corn basis improved consistently across the country this week. Basis, based off of the National Corn Index, moved up 3 cents to close out the week at -30.

The good news for corn basis this week is that nearly everyone saw basis move at least slightly higher. The largest gains were on the East Coast, with basis improvements of more than five cents. Throughout most corn producing states, however basis narrowed anywhere from 2 to 5 cents. Nebraska, Kansas and Oklahoma saw slightly lower basis gains of 1 to 2 cents.

Corn exports were less than expected this week, coming in at 33.6 million bushels, compared to trade expectations of 35-45 million. The pace of exports is still ahead of schedule and we may see the USDA increase its export forecast in the coming month. While we have seen especially wet weather in the Midwest this year, planting pace is also ahead of schedule. Corn planting reached 52% this Monday, while analysts were only expecting 50%. With planting pace now ahead of average, and plenty of moisture in the soil ,corn futures could move lower once fund buyers shift their focus away from corn.

Soybean basis was more varied across the country. Central Wisconsin and Eastern Nebraska saw some weakness in basis, but on the whole basis moved higher throughout most of the country. Iowa, Illinois and Indiana saw basis narrow by 1 to 5 cents, while Oklahoma, Texas and parts of Missouri saw basis improve anywhere from 5 to 10 cents. The National Soybean Index showed a 2 cent improvement in basis.

Weekly export inspections came in at 9.077 million bushels as compared with 8-12 million expected. Cumulative exports for the year are now 83.5% of the USDA forecast compared with the 5-year average of 86% for this time of the year. With concerns over rising energy prices, soybeans futures got a boost higher on Friday. Short covering also helped move prices higher, turning around the bearish declines earlier in the week.

Basis may continue to climb for another week or so, especially if futures decline, but once we move past planting, basis tends to be sluggish for the next month. In many years basis does not improve by enough to even cover storage costs. So if you are looking to lock in basis, now may be the time. If you can start marketing your old crop grain while your neighbors are still busy in the fields you may be able to earn a premium.

Consider trucking your grain to more distant markets. Some of the highest profits from trucking grain occur during planting when cash sales dry up. Search out the corn and soybean buyers that have tight supplies and are willing to pay you a premium for your grain.

Corn basis improved consistently across the country this week. Basis, based off of the National Corn Index, moved up 3 cents to close out the week at -30.

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