U.S. cash grain prices in parts of the Midwest have come under pressure as farmers look to unload grain before potentially devastating Missouri River Floods.
A heavy snowpack in the far northern U.S., along with tremendous rainfalls in Montana at the end of May, have prompted warnings of record floods further south, through Nebraska, Iowa and Missouri. Already one levee has sprung a leak, and the U.S. Army Corps of Engineers said Monday it will have to release record amounts of water from dams along the river system through mid-August at least.
Those holding grain are unloading while they still can.
"Basis has been softening as everyone moves as aggressively as they can so that they don't have weather issues," said Don Roose, president of U.S. Commodities in West Des Moines.
As a result, many terminals and processing facilities have filled to capacity, said Karl Setzer, analyst for MaxYield Cooperative in Iowa.
The flooding has changed the dynamic in some areas, as previously farmers were reluctant to sell the grain and end-users were growing nervous about their ability to source supplies as stockpiles dwindle ahead of the new harvest.
"Some buyers have pulled their near-term bids altogether as not only have their inventories filled, but they may not be able to make shipments if extensive flooding takes place," Setzer said.
The national cash price index for corn, maintained by MGEX in Minneapolis, showed a price of $7.33 3/4 a bushel on Friday, down from an all-time high the prior day.
That reflected an average basis of -20 1/4 to Friday's settlement of the nearby Chicago Board of Trade July corn futures contract.
The national cash price index for soybeans rose to $13.77 1/2, reflecting an average basis of -37 cents a bushel. The average cash price of $7.30 for soft red winter wheat reflected a basis of 43 3/4 cents versus the Chicago Board of Trade July contract.
The average cash price for hard red winter wheat of $8.34 1/4 reflected an average basis of -80 cents versus the Kansas City Board of Trade July contract, while the average cash price for hard red spring wheat reflected a basis of 56 1/2 cents versus the MGEX.
-By Ian Berry, Dow Jones Newswires; 312-750-4072; firstname.lastname@example.org