The national average basis for soybeans fell again this week, down nine cents from the middle of last week. Corn also continued its slide by falling an additional four cents since last Wednesday. With harvest now 15% complete for corn and 4% for soybeans, basis continues to slip lower as a result of this seasonal pressure.
The average spot soybean bid along the river fell seven cents, while crushing facilities declined a whopping nine cents for their spot basis. The bean complex has experienced a sharp basis decline for the last month and it doesn’t appear to show any signs of relief in the next few weeks. Soybean basis will continue to be pressured by the ongoing harvest and unfortunately the forward curve points to more selling directly off the combine. On average across the US, there is only a nine cent carry in the cash market for soybeans delivered in January, which is just under a two cent carry per month to store beans out until January. In 2011, the carry to store spot beans until January was over twice what we are observing this year. This lack of incentive to store beans will lead to a higher percent of soybeans sold off the combine, further pressuring spot bean basis in the coming weeks.
Corn basis across the nation has also continued its slide lower this week amongst harvest pressure. Corn basis looks to continue this trend in the coming weeks pressured by rising barge rates and a softening basis out of the Gulf. Corn basis lows will likely be unseasonably early, but we still expect further declines to print by next week’s report.