December 21, 2012 | Grain Hedge Insights | Jackie Roembke | Views: 269

Basis Levels Inch Higher

Basis levels were up modestly this week with sluggish demand keeping cash markets mostly quiet. On average across the U.S., spot corn basis managed a one cent gain for the week while spot beans were up 2 cents.

In the corn market, ongoing demand struggles for exports and ethanol has kept basis levels mostly stable. While December is a time of usually increasing basis levels, for this year December has seen only a modest 2 cent improvement in US average basis. Weak export conditions have taken its toll on the Gulf where basis levels backed off 6 cents for the week.  In the ethanol market, EIA’s weekly ethanol report showed production was down 2,000 barrels per day from last week and stocks of ethanol were sharply higher. Even with falling corn prices, margins continue to be weak for ethanol producers as prices for ethanol have fallen sharply as well. Since Dec 1, corn prices have come down 50 cents a bushel while ethanol prices have fallen 23 cents a gallon or 62 cents a bushel-equivalent, putting pressure on margins. Basis levels at ethanol plants did improve modestly this week, posting a 1.5 cent gain.

For soybeans, slower overall export demand along with news of Chinese export cancellations put pressure on futures markets, and helped slow basis growth. So far in December, US average soy basis is up 8 cents, but this week basis levels were up 2 cents. Soy processors were actually lower on the week as signs of less export business and significantly lower soymeal prices start to cut into crush margins. At the Gulf, export basis was off 8 cents.  

More Articles

Weekly Cash Comments

April 24, 2015 | Grain Hedge Insights | Cody Bills

Grain basis levels were modestly higher this week with both corn and soybeans posting an anemic 1-cent a bushel gain on average across the US this week.

 

In corn, it was a quiet week for export basis with the Gulf basis unchanged. River terminals found only modest strength with barge...

[Read More]

Strong Export Sales Lift Grains

April 23, 2015 | Grain Hedge Insights | Cody Bills

In the overnight session corn, soybeans and wheat are trading higher with corn up 1 cent, soybeans up 4 3/4 cents and wheat up 3 1/2 cents. The dollar is trading down nearly 1/4 of a percent and crude oil is up 56 cents a barrel.  

 

Export sales were very positive today for the grains...

[Read More]