Grain prices continued their slump over the past week, although an unexpected announcement that USDA would re-survey corn plantings may put a risk premium back in the market. USDA will ask farmers for updated acreage figures on corn in seven states: Illinois, Indiana, Kentucky, Missouri, North Dakota, Ohio and Pennsylvania, with the results released in the Aug. 12 Crop Production Report.
In the cash market, basis levels continued there trend of late with corn basis improving while soybean basis seeing large losses. Corn basis was up less than one-cent a bushel over the past week with the Western Cornbelt and Plains seeing 2 to 3 cent gains. Along the River system, corn basis was weaker as barge rates inch higher and Gulf basis sank 8 cents a bushel.
For beans, U.S. average basis levels were off 15 cents a bushel on average as front-month futures is deeply discounted to cash prices. Gulf bean basis was off 17 cents for the week, but the biggest weakness occurred in the processing plants of IL, IN & OH were basis levels slipped by 30 cents or more for the week.
Continue to expect bean basis levels to slide as end-users start to wait for lower prices to materialize on the board. In corn, basis levels may be tied to the path of futures. The sharp selloff in corn futures combined with strong carry in the market has many farmers holding tight to inventories. If futures begin to turn higher, farmers may become more aggressive marketers.