Basis continued to stagnate this week as the board continues to keep pipeline supplies well stocked for the near-term. On the week, US average corn basis nudged higher by 0.5 cents a bushel while soy basis softened by 0.3 cents a bushel.
The only major action this week occurred along export sensitive routes as corn basis caught a bid. The Gulf and PNW markets each were up, gaining 5 and 7 cents respectively on the week. River markets followed suit with a 4.5 cent basis improvement. However, heavy rains and melting snow-pack are likely going to cause barge problems in the coming week. Barge lines suspended operations on northern sections of the Illinois River on Thursday and several grain elevators along the lower Ohio River stopped loading barges because the rising river made it impossible for the vessels to get beneath grain spouts. For beans, basis levels were mostly flat at export origins and river terminals. Gulf basis continues to be soft as values trade at their lowest February levels since 2008.
For end users, there was little noticeable movement for corn or bean plants, although beans plants had a slight negative bias. Crush margin for soy plants have catapulted high, with values trading around $1.50 a bushel vs $0.85 a bushel last fall. With Argentina’s #1 position for soymeal exporting in jeopardy there should be considerable interest in the latter half of the marketing year for US meal supplies.
Basis levels for corn should start to perk up as we get closer to spring. The board rally in the last month has helped end users meet their needs but as flat prices stall out this should put the onerous on buyers to bid up basis to keep their needs met.
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