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Corn basis soars while soybeans sink

Agriculture.com Staff 05/30/2007 @ 12:45pm

Corn basis across the country averaged an improvement of 6 cents a bushel, as farmers continue to hold tight to old-crop inventories. Meanwhile, large gains in the soybean futures market in the past month have helped keep the cash pipelines full. As a result, cash bean basis lost 2 cents a bushel on average this week.

For corn, basis levels gained the most in the Plains and especially the southern half of Nebraska were gains of 9 cents or better were fairly common. In the eastern Cornbelt of Indiana and Ohio, gains of 6 cents a bushel for the past week were the norm, while Iowa and Illinois saw more modest gains of 3 to 6 cents. Rising barge rates helped to mute the basis increases in Iowa and Illinois. Barge rates were generally 6 to 8 cents a bushel higher over the last week.

For soybeans, basis levels softened 2 cents a bushel, as farmers continue to willingly move beans on lofty gains in the futures market. Like the case of corn, basis levels were weakest in Iowa and Illinois, along stretches of the river system impacted by rising barge rates. Parts of Indiana and Ohio experienced modest gains in soybean basis.

Look for corn basis to continue to hold firm in the near-terms. Farmers are likely to hold tight with the market somewhat nervous about growing conditions for new-crop. For soybeans, expect basis levels to only improve if we get a sharp sell-off in futures. Cash traders have all they need in the soybean bins for some time.

Corn basis across the country averaged an improvement of 6 cents a bushel, as farmers continue to hold tight to old-crop inventories. Meanwhile, large gains in the soybean futures market in the past month have helped keep the cash pipelines full. As a result, cash bean basis lost 2 cents a bushel on average this week.

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