Basis Levels Stagnant on Futures Rally
U.S. average soybean basis levels remain mostly unchanged for the second week in a row.
Corn and soybean basis saw little movement again this week as tight crop inventories mixed with struggling demand keeps basis levels treading water. For the week, US average corn and soybean basis levels averaged only a 0.3 cent a bushel increase.
For corn, Thursday’s EIA ethanol number showed the slump in production continued as weekly ethanol production was only 792,000 barrels per day. Grain Hedge still looks for lower corn used for ethanol than USDA’s projection of 4.5 billion bushels for the year. Tight crush margins continue to force some plants to curb production, and this week we saw key plants in Eastern Nebraska lower their basis by a nickel or more. On the export front, Friday’s weekly tally came in at 138,500 MT versus expectations that ranged from 200,000 to 450,000 MT. Basis levels at the Gulf slipped 4 cents a bushel for the week while river terminals were unchanged on average thanks to lower barge rates.
In beans, export business continues to be white hot, although much of the business is being directed at new-crop 2013/14 sales. As such, basis levels continue to be relatively flat. Weekly export business totaled 978,000 MT, above the high end of expectations at 950,000 MT although 595,000 MT was for new-crop delivery. At the Gulf, basis levels firmed a modest 2 cents a bushel. Crushing plants were unchanged on average across the sector.
