Grain markets continued to slide lower as last week’s bearish crop report numbers and ideal South American weather continue to put pressure on the futures market. In the cash market, both corn and soybean basis levels inched higher, posting 2-cent gains on average across the country.
For corn, basis levels were up throughout much of the country with the exception being along the Lower Mississippi River. Spotty areas in the Cornbelt posted 4 cent gains. At ethanol plants, basis levels have been mostly lagging the U.S. average moves. In the last week, corn basis at ethanol plants was up 1-cent a bushel compared to an overall gain of 2 cents across the country. In the past 30 days, ethanol plants have bolstered basis by 9 cents compared to a 10-cent advance by all US corn buyers.
The soybean market closely mirrored the cash corn market with overall gains coming in at 2 cents across the country. The Gulf market has remained flat over the last week showing little change. However, soy crushing plants have had basis gains that outpaced the overall U.S. average. For the past week, soybean plant basis levels were up 3 cents on average versus 2 cents on the U.S. average, while for the past month soy plants are up 10 cents and the U.S. average is up only 9 cents.
With falling futures, grain basis levels should continue to inch higher. However, corn elevators seem pretty full in some areas and while a few ethanol plants are bidding up basis, there seems to be no shortage of corn to keep pipelines full. Look for continued, but modest gains in basis levels over the coming weeks.