Sep 2, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


Cash Grain Insights

RSS By: Kevin McNew, AgWeb.com

Kevin McNew is President of Grain Hedge and Geograin. McNew was raised on a farm in central Oklahoma and received his bachelor’s degree from Oklahoma State University, and master’s and Ph.D. degrees in Economics from North Carolina State University. For over a decade, he was a Professor of Economics at the University of Maryland and Montana State University, focusing on commodity markets. He has received numerous academic awards for his research and outreach work, and was (and still is) widely regarded for boiling down complex economic issues into easy-to-understand concepts for applied life.

 

Basis Levels Stagnant on Futures Rally

Jan 21, 2013

 Both corn and soybean basis levels saw limited movement this week, as futures markets climbed on renewed concerns about short supplies. For the week, US average corn and soybean basis were unchanged.

hedgeyourgrain

In the corn market, higher than expected feed use reported in last week’s USDA report cut the old-crop ending stocks forecast below trade estimates. But, continued lack of business in the export market and ethanol sector has kept basis levels stable to weaker. For the week, ethanol plants lowered their basis by 1-cent a bushel. On Wednesday, EIA showed ethanol production took a hit for the week as production averaged 784,000 bushels per day, the lowest level since the agency started releasing weekly data in June 2010. Grain Hedge still expects final corn use for ethanol to fall short of USDA’s current target of 4,500 MB as weak margins for ethanol producers should limit production.

spotcorn 2013 01 18

For the soybean market, Gulf basis levels were off 9 cents a bushel which pushed river terminals down by 3 cents a bushel. Export sales continue to be on a torrid pace as this week’s total of 1.6 MMT was a marketing year high thanks to aggressive Chinese purchases.  Domestically, soybean crushing margins have started to weaken but still remain exceptionally high compared to historical norms. For the week, soybean plants increased basis by nearly one-cent a bushel.

spotsoy 2013 01 18

Log In or Sign Up to comment

COMMENTS

No comments have been posted, be the first one to comment.
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions