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Planting season keeps basis inching higher

Wet weather plagued much of the Plains and Western Cornbelt this past week, keeping farmers from making progress on planting. Over the weekend, 2 to 4 inches of rain fell from Iowa down to Oklahoma. Futures prices responded at the end of last week to the wet weather, but pushed lower on Monday as drier forecasts were in the latest weather models.

Basis levels around the country reflected how much time farmers were spending in the field as well. In the eastern Corn Belt, where conditions are more favorable for planting, grain merchandisers were bidding up corn basis by 3 to 5 cents a bushel trying to keep pipelines current. In the western Corn Belt of Iowa, Minnesota and Wisconsin, wet weather kept farmers out of the field and corn movement on a more normal pace. Basis levels in these regions were mostly unchanged to up a penny.

For soybeans, basis levels were up 2 cents on average across the country as compared to a 3-cent per bushel average gain for corn. Like corn, soybean basis showed the least amount of improvement in the Western Cornbelt and Plains, while far reaches of Ohio and the Eastern Seaboard posted 3-cent or better gains.

Over the next few weeks, basis levels should mostly hold ground as farmers continue to be occupied with planting. However, keep in mind that forward carry in this market is extremely limited so storing on basis into June and July is generally not profitable with carry of 1 to 2 cents a month being fairly common.

Wet weather plagued much of the Plains and Western Cornbelt this past week, keeping farmers from making progress on planting. Over the weekend, 2 to 4 inches of rain fell from Iowa down to Oklahoma. Futures prices responded at the end of last week to the wet weather, but pushed lower on Monday as drier forecasts were in the latest weather models.

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