Weekly Cash Comments

Grain basis was mixed this week, with soy basis mostly unchanged on the week while corn basis posted its biggest weekly advance in the new-crop year with a 2-cent gain.

US average corn basis has shown very little response to harvest pressure this year holding flat for much of the past month as harvest has likely reached the mid-point mark. This week, corn basis actually moved higher on average, led by gains at river terminals which were up 5 cents on the week, fueled by slumping barge rates. For the week, barge rates on the IL River are off 7 cents a bushel, and stand at nearly a 50 cent discount to the same time last year, which is supporting grain basis. For soybeans, river terminals were up 2.5 cents a bushel even though bids at the Gulf were off 6 cents.

End users this week were less reluctant to raise bids as pipeline supplies seem abundant in most areas. However, ethanol plants as a group were up 1 cent a bushel, with some plants in southern Midwest areas showing more aggressiveness in upping their bids. Soy crushing plants were off nearly 10 cents a bushel as some plants dropped basis by a dime, while very few saw the need to boost basis.

Look for corn basis to start its seasonal recovery in the coming weeks with strength likely to carry on through the end of the calendar year. We would expect basis levels to improve 10 to 20 cents a bushel over the next 2 months as light farmer sales and weak futures keep farmer movement somewhat limited.

—Cody Bills