Basis, or the difference between cash and futures, has tumbled in the past month. Based on a national cash price index maintained by the Minneapolis Grain Exchange, cash prices were at a 14 1/4-cent premium to nearby Chicago Board of Trade futures as of Aug. 9.

By Monday's close, however, futures had soared past the cash price, with nearby September CBOT corn of $7.34 1/4 per bushel 14 cent above the average cash price. Futures had closed at $6.78 1/4 per bushel on Aug. 9.

As more grain becomes available, farmers seem more willing to move newly harvested grains to the supply line to take advantage of current bids, said Karl Setzer, analyst with Max Yield Cooperative in West Bend, Iowa, in a market note.

"This is a sign that cash values are high enough to encourage movement and may be limited from here on out," he added.

However, sluggish near-term export demand from the Louisiana Gulf is helping support barge basis levels.

Midday barge basis levels for shipment of corn to the Louisiana Gulf ranged from 47 cents to 59 cents over December futures, up 3 cents from Monday, according to data from the U.S. Department of Agriculture.

Meanwhile, processors and ethanol plants that have not secured enough inventories to carry them through the fall harvest continue to report price premiums for corn supplies. Nevertheless, the premiums are slipping in unison with other basis levels.

In Indiana, the basis ranged from 5 cents lower than December futures to 20 cents over December futures, according to data from USDA. In Ohio, ethanol plants are paying from 20 cents to 25 cents over December futures.

-By Andrew Johnson Jr., Dow Jones Newswires, 312-347-4604, andrew.johnsonjr@dowjones.com

(END) Dow Jones Newswires

September 13, 2011 13:59 ET (17:59 GMT)