Grain harvest continued its quick progression this week, but some areas of the country saw unusually strong upside basis moves. Overall, however, the US average corn basis was mostly unchanged while soybeans were off 1 cent over the past week.
Impressive gains at some key end users were noted for corn this week in NE, IA & IL, but overall ethanol plants as a group were off -0.7 cents for the week. River terminals were mostly higher propelled by strength out of the Gulf and a modest decline in barge rates on the Southern Mississippi River region, although more northern areas of the Mississippi and Ohio saw stronger barge rates and weakening basis.
In the bean market, basis levels continued to fall overall but pockets of strength and weakness were apparent this week. In the Upper Midwest and Eastern Cornbelt, basis levels saw losses of 5 or more cents but areas along the river were mostly unchanged thanks to a 6 cent gain out of the Gulf. Soybean processing plants, however, were weaker with a 3 cent loss on average for the week.
Reports from the cash market indicate farmer selling has been limited by the recent drop in futures. As a result, producer deliveries have mostly been filling existing contracts and not much spot-only delivery. While this has lead to basis strength in some areas around end users, some feedlots in the Plains are reporting they have all their feed needs priced for the next six months which may be signs of demand destruction. Further, export business has been anemic of late, with the latest weekly sales figures showing a dismal 400 MT of corn sold, when normally we are selling 400,000 to 1 million MT a week.
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