July 03, 2014 | Grain Hedge Insights | Cody Bills | Views: 208

Soybean Basis Jumps as Futures Slide

Corn and Soybean Basis Diverge in the Wake of June 30th Planted Acreage Report and Quarterly Grain Stocks

 

This week we have seen a divergence in corn and soybean basis. Corn basis for spot delivery has decreased 2 cents on average for the week ending 7/2/14 while soybean basis increased 2 cents on average throughout the U.S. during the same time period. The largest basis changes occurred for premium soybean facilities such as crushing plants and for terminals along the river. The roll from the July contract into the August or September contracts have played a big role in the basis landscape this week.

Soybean basis along the river improved an average of 6 cents this week to help entice grain out of farmer bins after soybeans futures for the August contract sold off 47 cents in the last seven days. Cash movement has been slow as farmers remain uneager to sell into the weakness following the bearish June 30th planted acreage report and quarterly grain stocks report.  Soybean crush plants also bumped their basis by 6 cents on average throughout the country.

 

Shipping delays continue to be problem along the river. This week the river continues to have delays as a result of high waters. Continued rains in that region have caused a number of lock closures and are likely to stop barge movement between Bellevue, IA and Clarksville, MO. The closures began on June 27th at New Boston, IL and should affect Clarksville, MO by July 7th. It is unknown how long these delays will last.

 

Corn basis at ethanol plants declined 1 ¼ cents this week in line with the country average as basis along the river took the biggest hit, dropping -4 ½ cents. 

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