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Soybean basis historically high

05/08/2013 @ 1:00pm

U.S. cash basis bids for soybeans are trading at historically high levels, a signal of the tight availability of domestic stockpiles of the oilseed.

Physical supply of soybeans in cash markets for near-term delivery continues a firming trend, as large processors including Archer Daniels Midland Co. (ADM) and Cargill Inc. signal that soybeans could be tough to come by until the next harvest in the autumn.

"Midwest soybean basis bids rose to new historic highs on Wednesday with published bids of $1.00-$1.25 a bushel over futures for May delivery, as domestic processors are concerned about the lack of supply through summer," analysts at advisory firm AgResource Company wrote in a morning market note. The drop-off in cash prices from May delivery to September delivery is nearly $3.00 a bushel, reflective of a market working hard to get farmers to part with any remaining stored soybean supplies, AgResource Company added in the note.

Cash merchants in central Illinois are paying $1.25 cents a bushel above Chicago Board of Trade July soybean futures, according to data from the U.S. Department of Agriculture. Merchants in Havana, Ill., report cash prices $1.12 above futures, up 12 cents from Tuesday, while Des Moines, Iowa, merchants are quoting cash bids of $1.05 above futures, up 15 cents from Tuesday.



Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
May 08, 2013 12:42 ET (16:42 GMT)
DJ U.S. Soy Cash Basis Bids Historically High Amid Tight Supplies->copyright


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