Soybean Basis Drops After Sharp Rally in the Futures Market
Corn basis improved 3 ¼ cents on average supported by tight stocks and a less dramatic rally in the futures market
Soybean basis dropped sharply, falling 25 cents throughout the country. The explosive rally in the futures market helped increase farmer selling causing grain buyers to back off old crop basis. Corn basis improved 3 ¼ cents on average throughout the country supported by tight stocks and a less dramatic rally in the futures market.
Soybean basis weakened sharply at crush facilities which slipped 35 cents on average throughout the country. Despite a mostly unchanged Gulf basis, river terminals also posted basis declines, dropping on average 18 ½ cents.
Spot corn bids at ethanol facilities improved 4 ¾ cents this week despite a weakening crush margin. Recent rallies in old crop corn futures combined with lower ethanol and DDG prices have cut ethanol margins in Iowa to just $2.04 per bushel, down nearly 50 cents per bushel since the beginning of the month. Tight old crop stocks and lagging new crop maturity should continue to support old crop corn basis throughout September.