Widely divergent corn basis figures this fall reveal the eastern and western Corn Belts are two very different places, says Chip Nellinger, Blue Reef Agri-Marketing.
“In the eastern Corn Belt, it feels a lot like 2012,” Nellinger tells “AgDay” host Clinton Griffiths on the Agribusiness Update segment for Monday, Oct. 26, 2015. “Basis is just screaming, 30 [cents] to 40 [cents] over really through the tail end of harvest. That’s almost unprecedented. Yet in the same breath you’ve got producers out in the far northwestern Corn Belt, they’re looking at 40 [cents] to 50 [cents] under basis or worse. [There are] piles on the ground out there.”
At the same time, this isn’t a duplication of 2012.
“Maybe this basis strength isn’t quite as bullish as we saw in 2012 because that was a crop failure and a crop shortage,” Nellinger points out. “This is still going to be the second- or the third-biggest crop we’ve ever raised, so there’s no supply shortage. It’s just the supply is where they don’t need it necessarily, and the lowest supply—in the eastern Corn Belt—is where the best processor demand is. A very interesting fall and winter is shaping up ahead of us.”
Click the play button below to watch the complete video interview with Nellinger on “AgDay.”