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Soybean basis turns higher

Agriculture.com Staff 04/30/2008 @ 1:00pm

Soybean futures have taken a beating over the last week, falling a $1 a bushel as concerns about the Argentinean farmers strike eased. Corn pries held their ground pretty well, only giving up about a nickel over the last 5 days of trading.

In the cash market, soybean basis levels have recovered sharply in recent weeks. While soybean basis levels have been running 50 cents or more below historical norms, the last month has seen a surge in soybean basis helping to trim the deficit. Terminal river markets have added 40 to 50 cents a bushel to soybean basis in the last 6 weeks. Processors have also followed suit raising bean basis but the levels are mostly 30 to 40 cents stronger amongst key processors.

For the week, average U.S. soybean basis levels gained 7 cents a bushel. The strongest gains occurred in the western Corn Belt and parts of eastern Illinois and western Indiana. Regions further south saw little improvement in basis over the last week, and the Gulf export market was unchanged. With soybean exports mostly lackluster, this may continue to put pressure on soybean Gulf basis levels.

For corn, basis levels across the U.S. posted modest improvements, averaging a 2-cent gain for the week. Isolated parts of Iowa, Indiana and Ohio saw better than average gains of 3 cents or more, while much of the Southern and Northern sections of the country were unchanged to slightly weaker.

With soybean basis gaining considerable ground in the past month and exports showing signs of slowing, the next few weeks will likely spell more stable to even weaker basis levels in the soybean cash market. Corn could continue to see some strength as stocks remain tight and stable futures will likely keep farmers holding tight to old-crop supplies.

Soybean futures have taken a beating over the last week, falling a $1 a bushel as concerns about the Argentinean farmers strike eased. Corn pries held their ground pretty well, only giving up about a nickel over the last 5 days of trading.

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