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Corn basis climbs on stronger end-user demand

Agriculture.com Staff 04/08/2010 @ 6:29am

Last week's acreage and stocks report sent grain futures lower, but cash basis levels in corn managed to buck the trend as stronger Gulf basis and ethanol plant basis levels pushed U.S. average basis up by 2 cents for the week.

At the Gulf, export basis levels climbed 3 cents a bushel the past week which helped push basis levels along river terminals higher as well. Helping also was a strong surge by ethanol plants, which were up 3.5 cents a bushel on average over the last week.

For soybeans, basis levels were mostly unchanged for the week with some minor weakness noted along the river system. Gulf bean basis slumped 3 cents for the week and that took a toll on upstream river terminals. However, there was some modest improvement in bean basis at soybean crushing plants, which boosted their basis by nearly 2 cents over the last week.

With futures continuing to favor the downside on the heals of negative stocks and acreage projections, basis levels should hold relatively firm. Furthermore, with farmers turning their attention to planting pipeline supplies should start to diminish, giving basis levels more upside pressure.

Last week's acreage and stocks report sent grain futures lower, but cash basis levels in corn managed to buck the trend as stronger Gulf basis and ethanol plant basis levels pushed U.S. average basis up by 2 cents for the week.

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