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Price gains come with slow harvest

As wet weather continued to slow the pace of corn and soybean harvest, basis levels moved higher in most parts of the country this week.

Corn harvest was 13 percent completed versus 17 percent last year. Soybean harvest was 9 percent harvested versus 17 percent last year.

While the discrepancies don't appear that large, at a local level there are some harvest delays that are causing big price increases. Indiana and Ohio were both at only 2 percent harvested versus 12 percent last year. As a result, soybean basis saw 20-cent gains at some key end-user markets in this region. Most elevators we spoke with in this area were out of beans and anxiously awaiting harvest to pick up the pace.

In the Western Corn Belt, basis levels held in check and even managed to move lower in some areas. Soybean basis slipped slightly along the Illinois River, as barge rates from this river area were up 5 cents for the week. On the Upper Mississippi River, barge rates were up 2 cents a bushel for the week, pushing soybean and corn basis lower.

Basis should begin easing as harvest progress gains some speed. In the Eastern Corn Belt, where crop sizes are expected to be larger, look for big drops in local basis over the next 4 weeks. However, with large crops, there are also large forward carries built into forward prices. Locking in a decent return to storage and re-owning with a call option may be a prudent strategy in these surplus areas.

As wet weather continued to slow the pace of corn and soybean harvest, basis levels moved higher in most parts of the country this week.

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