Silver Lining for Farmers

August 12, 2009 07:00 PM
 

Charles Johnson, Farm Journal National Editor

Basis has improved through much of the Corn Belt, reports Kevin McNew, president of CashGrainBids.com. "We've seen basis levels return to what we used to think of as normal in the early 2000s. Farmers are not having to bear the impact of high transportation costs, so they've won in that sense,” he says.

As the map shows, weaker barge rates have helped raise basis levels, especially in the Illinois and Ohio River regions, where rates fell 40¢ in the past six months (Mississippi River rates fell 20¢).

"Another reason Eastern Corn Belt basis has strengthened more than the Western Corn Belt is because corn use for ethanol has been sluggish,” McNew says. That may turn around in 2009/10 because of new ownership of some key VeraSun plants, energy prices moving higher and corn prices dropping, he says. Acres also may be up more in the Western than the Eastern Corn Belt.

"Looking ahead for fall, barge rates are contracted at levels we were accustomed to last year when prices were still high,” McNew says. "My gut says that those will come down when we get to harvest, so I think basis levels should be fairly favorable this harvest.”




 
You can e-mail Charles Johnson at cjohnson@farmjournal.com.
Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by Barchart.com
brought-by
Close