Weekly Cash Comments

Corn basis was unchanged for the week on average across the US while soybean basis improved a modest one-cent a bushel.

Ethanol production fell for the 2nd straight week as a normal seasonal decline starts to take hold. Although ethanol fuel prices have come down sharply in response to lower gasoline prices, DDG prices have moved higher helping to keep ethanol margins propped up. Year-to-date production is still running 4.8% ahead of the same period last year, although USDA is only factoring in a 0.3% increase in corn use for ethanol on the year. Ethanol plants as a group were up nearly 2 cents a bushel on spot corn basis this week, although must of the strength was confined to the Western Cornbelt where basis levels were up a dime at some key plants in IA & NE. At the Gulf, basis levels were off 2 cents a bushel but had little impact on upstream river terminals as basis levels were unchanged on average across river markets.

For soybeans, basis levels improved 1–cent a bushel across the US but river terminals saw a better improvement thanks to an 8-cent gain at the Gulf this week. Although soybean export business was expected to slow in the start of the New Year, weekly sales of 910,000 were better than the 500,000 to 700,000 MT expectations going into the Thursday announcement by USDA. For soybean crushing plants, basis levels were unchanged on average for the week.

—Cody Bills