Soy basis firm; farm movement slows
U.S. cash basis bids were mixed Thursday, with soy basis firm amid limited farm movement of supplies.
"Country movement of soybeans has ground to a halt, leaving commercial elevators to fill needs, and these sellers tend to be more resilient, especially in a declining market which provides margin returns," said Karl Setzer, analyst with MaxYield Cooperative, in a market note.
Meanwhile, export basis continued to weaken on soybeans as it is increasingly apparent buyers are much more interested in South American supplies than the U.S. as the Brazilian harvest wraps up, Setzer added in the note.
The export basis, or difference between cash prices and futures, was unchanged for wheat, corn and soybeans at the Louisiana Gulf, according to U.S. government data.
U.S. Department of Agriculture's weekly export sales report released Thursday said total soybean export sales were a net 79,300 metric tons for the week ended April 7, with 130,200 tons for delivery in the 2010-11 marketing year that ends Aug. 31. Analysts had forecast 2010-11 marketing year sales between 100,000 and 200,000 tons, and 2011-12 sales between 100,000 and 200,000 tons.
In contrast to soy basis, the market has seen country movement of corn recently. "Corn basis is weak in all markets as we are still seeing that grain move, with inventory of corn much greater," Setzer said.
Meanwhile, barge freight basis has held steady, a reflection of higher fuel costs than a big push from the Gulf.
Gulf midday barge freight basis reported by USDA Thursday said the spread for spot corn bids ranged from 48 cents to 57 cents over May futures, down 4 cents from Wednesday. Soybean bids ranged from 47 cents to 67 cents over May CBOT futures, up 3 cents from Wednesday.
Otherwise, country grain movement in the U.S. dropped off significantly, not uncommon at this point of the year, as producers have all shifted their primary focus to the spring planting season. Producers have already moved a large amount of grain and that is also restricting grain flow at this time, analysts said.
The Telvent DTN weather forecast calls for episodes of rain, thunderstorms and even some snow to cover almost the entire Midwest during the next five days. This pattern will bring field work and corn planting to a standstill. This pattern will continue to feature additional threats of severe weather and more rain during the 10-day period as well, Telvent said.
-By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604; email@example.com
(END) Dow Jones Newswires
April 14, 2011 14:35 ET (18:35 GMT)