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Kevin McNew: New-crop basis holds firm

Agriculture.com Staff 04/16/2008 @ 7:30am

Grain markets seemed to gain some stability after two weeks of volatile trade. Since the March Planting Intentions Report new-crop corn futures have traded 40 cents higher. Although soybeans took an initial fall after the report, futures have climbed to a $1.50 higher than their pre-report levels.

New-crop basis levels have held relatively steady across the country since the report. Both corn and soybean new-crop basis levels were unchanged on average since the march 31 report, although certain parts of the country have seen some relative strength or weakness since the end of March.

Fall delivery corn basis was slightly weaker in the Western Cornbelt of as losses of a few pennies in basis were fairly typical. Some strength in basis was noted in parts of Ohio.

For soybeans, new-crop basis levels have gained some ground in Iowa, Illinois and Ohio. Some parts of the Plains and Minnesota saw new-crop soybean basis sell-off a bit in the past few weeks.

Basis levels this fall should be challenging. With ample soybean acres, the cash market will likely keep soybean basis levels at depressed levels into harvest. On the other hand, a shortage of corn and especially tightness in the Western Cornbelt could lead to strong corn basis gains for the 2008 crop.

Grain markets seemed to gain some stability after two weeks of volatile trade. Since the March Planting Intentions Report new-crop corn futures have traded 40 cents higher. Although soybeans took an initial fall after the report, futures have climbed to a $1.50 higher than their pre-report levels.

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