The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Slow Harvest Pace Keeps Basis Levels in Check
Oct 21, 2009
Another incremental week of grain harvest kept basis levels slightly weaker, but still holding relatively firm. Corn harvest went from 13% completed to 17% finished this past week, while soybeans went from 23% to 30% over the week. Basis levels were off 2 cents a bushel for both corn and beans, but much of the weakness was confined to areas along the River system.
Both corn and beans saw weaker basis at the Gulf for the week, with corn off 3 cents and beans off 4 cents. Further upstream at hinterland river terminals, grain basis was weaker still by 5 to 10 cents a bushel at most markets. A combination of harvest and slightly higher barge rates put pressure on these markets. However, the bulk of the harvest pressure still lies in wait. Other end-users continue to keep basis levels firm. On average, ethanol plants across the country were unchanged on corn basis for the weak, while the U.S. corn was 2 cents a bushel weaker.
Weather will continue to control the pace of harvest. The outlook still calls for intermittent rains throughout the bulk of the Midwest, especially in the Plains and Western Cornbelt for the coming days. By the weekend, the outlook appears more promising for harvest progress.