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Firm basis to spark wheat marketings
CENTRAL CITY, Neb. (Dow Jones)--Generally slack country movement held U.S.
cash grain basis firm again Wednesday, apart from harvest-induced pressure that
pushed domestic spring wheat premiums down by an average of 3/4 cent per
With wheat futures on U.S. exchanges within 75 cents of all-time record highs
set in 1996, some market analysts have recently been advising growers to
actively sell their 2007 production, and hedge future wheat crops, as well.
"Wheat is currently trading at the highest price in history for this time of
year," said analyst Bob Utterback. "We believe all wheat producers must be
looking at multiple-year sales now."
Interior basis was on the rise for all other commodities Wednesday, featuring
average gains of almost 2 cents a bushel for soybeans.
"During most of the summer, soybean basis levels have been in the tank, but
there are signs that the situation is changing," said Ag Management Services
market consultant Rich Balvanz, who Tuesday noted that spot soybean basis in
the Cedar Rapids, Iowa, processor market had reached its highest level in over
a month. "AMS expects soybean basis levels will continue to improve."
Domestic basis for corn and winter wheat also edged about 1 cent higher
Wednesday, supported by slow farmer selling.
"Producer replacement (of corn) has remained light to non-existent," said
Benson Quinn Commodities analyst Jon Michalscheck Tuesday.
Grain futures were quiet in overnight trading, leaving cash corn, oats and
hard red winter wheat contracts within 1 cent of unchanged. Nearby contracts
rose 1 1/2 cents for SRW wheat, 2 1/2 cents for soybeans and 3 1/2 cents for
"Higher than normal temps are expected to continue in the Corn Belt into next
week," said analyst Alan Brugler. "That speeds up (crop) maturity, but also
tends to hurt yields in areas where there isn't enough moisture to keep up with
plant respiration needs."
National cash price indices maintained at the Minneapolis Grain Exchange
currently stand at $7.39 1/2 for soybeans, indicating an average basis level of
-94 1/2 cents relative to Aug contracts at the CBOT. Domestic cash prices also
average $3.08 for corn (-17 3/4 cents basis Sep CBOT corn), $5.72 3/4 for HRW
(-56 1/4 cents basis KCBT Sep wheat), $5.54 1/2 for SRW (-75 1/2 cents basis
CBOT Sep wheat) and $5.61 3/4 for HRS (-65 1/4 cents basis Sep MGE wheat).
The Joint Agricultural Weather Facility housed at USDA said hot, mostly dry
weather persists in the Pacific Northwest, to the benefit of small grain
harvest, although isolated showers were keeping combines out of wheat fields in
northern portions of the Great Plains Wednesday.
Scattered rains were also lingering on the central/southern Plains,
maintaining adequate to locally excessive soil moisture reserves for summer
Meanwhile in the Midwest, some of the hottest temperatures of the season are
increasing stress on developing corn and soybeans, especially in eastern and
northern areas of the Corn Belt.
JAWF forecasters said a cold front crossing the northern Plains will reach
the Great Lakes region by Thursday, accompanied by scattered thunderstorms.
Rain will also linger for across the Deep South, although hot, dry weather will
persist through the end of the week in the Midwest and Mid-Atlantic, with daily
high temperatures frequently exceeding 95 degrees Fahrenheit.
(END) Dow Jones Newswires
Copyright (c) 2007 Dow Jones & Company, Inc.
CENTRAL CITY, Neb. (Dow Jones)--Generally slack country movement held U.S. cash grain basis firm again Wednesday, apart from harvest-induced pressure that pushed domestic spring wheat premiums down by an average of 3/4 cent per bushel.