Grain harvest is later than normal and off to a slow start with scattered rains, but basis levels are starting to feel the pressure. Many elevators reported receiving heavy deliveries of corn in recent days, and moisture content was high forcing merchants to slow down receipts. For the week, corn basis was off 2 cents on average while bean basis was off 5 cents.
At the Gulf, corn basis was off 6 cents a bushel which caused similar declines along the River terminal markets in Missouri, Iowa, Illinois and Indiana. Many parts of the country were only a few cents weaker, and sections of the Western Cornbelt remained mostly unchanged with harvest yet to hit.
For soybeans, Gulf basis was off sharply, losing 25 cents on the week which took its toll on interior River basis levels. As harvest starts to take hold, many Eastern Cornbelt markets saw double-digit losses on basis as well.
Continue to expect basis levels to come under heavy pressure in coming weeks. Basis levels had been running exceptionally high because of the delayed harvest and farmers holding tight to old-crop supplies. But, ample new-crop supplies and a recent jump in futures price on frost scares should keep deliveries heavy to local markets. We look for a quick and steep drop in basis as bin space should be at a premium this Fall.