Weakening Gulf Basis Weighs on Soybeans
U.S corn and soybean basis diverged this week as soybean basis slumped in the face of corn strength.
Corn and soybean basis moved in opposite directions this week as farm soybean sales picked up and weakening Gulf bids pushed basis lower. For the week, corn basis was up 2 cents a bushel while soybean basis lost 2 cents a bushel.
For corn, basis levels were firmer by 3 cents a bushel at ethanol plants as margin levels for processing corn to ethanol improved the past week for the first time in about a month. Nonetheless, margins continue to be tight and about 6 plants have idled production in the past few weeks. At the Gulf, export basis levels were up 4 cents on the week and river terminals posted a 3-cent advance
In soybeans, basis weakness was widespread across much of the country with the exception being Eastern Cornbelt regions. On average, soybean basis dipped 2 cents over the last week as a 50-cent advance in nearby soybean futures pushed more farmer beans in to the pipeline. At the Gulf, basis levels weakened sharply, dropping 14 cents a bushel as export business starts to cool. As a result, river markets showed an 11-cent loss for the week, while soybean plants were off 3 cents for the week.