Soybean Basis Jumps while Corn Stays Sluggish
Soybean basis saw double-digit gains in many parts of the country, while lackluster export demand kept corn basis improvements modest
Soybean basis saw double-digit gains in many parts of the country this week as strong export bids and falling barge freight helped push basis levels higher. For the week, U.S. average soybean basis was up 4 cents a bushel while corn
Spot soybeans rose sharply on the river system this week, bolstered by a decline in shipping costs to the lowest levels since before the autumn harvest. An adequate supply of empty vessels on U.S. Midwest rivers pressured barge freight, with shipping costs on the Illinois River falling to the cheapest since August. Gulf premiums also rose by 10 cents a bushel . On average, river terminals were up 12 cents a bushel for the week while soybean crushing plants lagged behind with a 4-cent advance.
In corn, lack of strong export business continues to plague the market. This week’s paltry sales of only 49,000 MT underscores just how bad the corn export picture really is. Total year-to-date export sales of corn are 48% below last year, while USDA has pegged exports to fall only 25%. In the cash markets, corn basis was up modestly across the country thanks to a 6-cent gain at the Gulf. However, ethanol plants continue to show spotty needs. Some plants in ND and MN drove basis higher to start the New Year while plants in IA were mostly weaker. On average, ethanol plants were up 2.5 cents for the week.