Corn basis continued to move upward this week as futures fell off roughly 12 cents. Basis was up 3 cents on average in Iowa, Illinois, and Indiana.

Similar basis increases were seen through most of the country. Basis was weaker to the South, dropping a penny in Arkansas. Similar 3 and 4 cents gains were seen at select key markets. Many ethanol facilities boosted basis even higher. Plants at Clinton and Eddyville, Iowa raised basis by 5 and 9 cents respectively.

Strong corn demand this week also put upward pressure on basis. Weekly export inspections were 44.9 million bushels, a fair bit larger than the 35-39 million bushels traders expected. A 10% decline in barge rates pushed more grain south and basis at the Gulf dropped 2 cents despite the strong exports.

On Monday, cash sales were brought to a stand still as severe weather made many midwestern roads unsafe for grain trucks. Nebraska appears to be getting the worst of it, with more than 6 inches of snow falling in places on Monday. This storm will push basis up for two reasons. First, with limited cash sales and cold weather, grain buyers will be forced to increase basis after a few days to pull in more grain. Secondly, traders will be predicting higher moisture levels as a result of the snow and we may see futures continue to stumble.

On Monday, wheat futures,which now have a drought premium built in, dropped sharply on the weather news. Weakness in wheat pulled corn down as well. Futures and basis often move in an opposite direction and so any increasing weakness in futures could push up basis in the coming week. Its spring time. Get in the back seat. Weather will be driving the markets from here until harvest.

Corn basis continued to move upward this week as futures fell off roughly 12 cents. Basis was up 3 cents on average in Iowa, Illinois, and Indiana.