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Grain basis starts seasonal decline
Both corn and soybean basis levels posted solid gains over the last week across the country as harvest wrapped up. On average, corn was up 2 cents a bushel for the week while soybeans posted a 3-cent advance.
Gains were most apparent in the western Corn Belt and northern Plains were basis levels there have been running exceptionally weak. Gains of 5 to 10 cents a bushel were fairly typical in these regions were basis levels have been the lowest we’ve seen in the past 5 years.
On the river system, both corn and bean basis were off thanks to lower Gulf bids and barge rates inching higher in recent days. Barge rates were up about 5 cents a bushel over the past week which put pressure on interior basis levels around the river system.
In the eastern Corn Belt, gains were more prominent for corn than soybeans. Basis levels are running about on par with historical norms for this time of year in this art of the country as compared to the western Corn Belt were basis levels are weaker than normal for this time of year.
With harvest in the books, basis levels should start to improve. Corn in particular may start to see more aggressive growth as relatively weaker futures prices and strong carry will likely keep farmers holding tight to their crop.