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Grain basis dampened by Gustav, rising barge rates

Agriculture.com Staff 09/05/2008 @ 2:29pm

Grain basis levels sunk lower in soybeans, and were up slightly for corn over the past week. Corn managed a 2-cent improvement on basis, while soybeans were off 10-cent for the week.

Barge rates helped contribute to the weakness along key river markets. As Hurricane Gustav approached New Orleans this past week, barge rates moved higher in anticipation of a repeat of Hurricane Katrina. Indeed, the Coast Guard did shut down the lower Mississippi River system on Sunday, but announced that it would be re-opened Wednesday of this week. As a result, barge rates and traffic should return to normal quickly. However, this time of year barge rates tend to increase as harvest gets underway in Southern parts of the country, and so any weakness in barge rates may be temporary.

For corn, basis levels were noticeably weaker along the Southern part of the country especially around river terminals. However, sluggish deliveries to end-users are keeping basis levels at ethanol plants relatively strong, and notable strength was apparent in Iowa and South Dakota over the past week.

In soybeans, basis levels were hit hard along the river system where losses of 15 to 20 cents a bushel were common. Most areas of the country were down on soybean basis over the past week. With an ample crop coming to market soon, most elevators seem reluctant to bid aggressively on beans and weak basis will likely be a common theme until we get past harvest.

Grain basis levels sunk lower in soybeans, and were up slightly for corn over the past week. Corn managed a 2-cent improvement on basis, while soybeans were off 10-cent for the week.

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