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New-crop bean basis gains ground

Agriculture.com Staff 05/28/2008 @ 11:13am

Farmers made solid progress getting crops planted in the past week. USDA reported 88% of the U.S. corn crop was planted, up from 73% last week, but down from 94% on average. However, emergence is still lagging at 52% versus a norm of 76% for this time of year. Soybean plantings were 52% up from 27% last week but still behind the average pace of 67%.

As farmer tractors rolled over the last month, soybean futures have seen solid gains for new-crop delivery. Since the end of April, November bean futures have added a $1.50. Corn futures, while trading as high as $6.60 have come under pressure in recent weeks leaving prices mostly unchanged over the past month.

Basis levels for new-crop delivery have been mostly stable, but are slightly weaker for corn and slightly higher for soybeans over the past month. Corn basis was 1 cent a bushel weaker in the last 30 days on average across corn buyers quoting a new-crop delivery price. Areas in the Southern grain belt experienced wider losses of 2 or more cents a bushel, while a few isolated spots had some small gains in basis. The Texas Panhandle has seen some strong gains in corn basis as new ethanol construction begins to come online in this region.

For soybeans, basis levels were mostly stronger with gains of 2 cents on average in new-crop basis over the last month. Areas along key river markets were the notable exceptions. Barge rates for deferred delivery continue to inch higher putting pressure on new-crop corn and bean bids along the river. On the Upper Mississippi River, barge rates for fall delivery have gained about 8 cents a bushel in the last month. Also, they continue to trade at elevated levels compared to norms. Current forward barge rates are trading about 20 cents a bushel higher than the five-year average for fall delivery.

Farmers made solid progress getting crops planted in the past week. USDA reported 88% of the U.S. corn crop was planted, up from 73% last week, but down from 94% on average. However, emergence is still lagging at 52% versus a norm of 76% for this time of year. Soybean plantings were 52% up from 27% last week but still behind the average pace of 67%.

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