Weekly Cash Comments

Basis levels continued to ascend higher this week all the while futures markets came under selling pressure. For the week ending Thursday, Nov 5th, US average corn basis was up 3 cents a bushel while bean basis posted a nearly 5-cent advance on the week.

Basis levels in corn and beans both continued to be supported by plummeting barge rates. On the week, IL River barge rates gave up 5 cents a bushel, which helped push terminal corn bids higher by 4.4 cents a bushel and soy bids up by 7 cents a bushel. At the Gulf, it was a mixed week as export terminal bids were off 2 cents on corn and up 3 cents on beans.

For end users, basis levels were up at corn ethanol plants gaining 4 cents a bushel versus 3 cents a bushel on the US average. Weekly ethanol production was up sharply according to EIA gaining to 969,000 BP versus 944,000 BPD in the previous week. Likewise, soybean crushing plants posted better than normal results with a 5.3 cent advance.

Look for basis levels for both corn and beans to continue to capitulate in the next two months on slow farmer selling and weak to lower futures markets.

The risk of trading futures, hedging and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

—Cody Bills