Call & Check Your Soybean Basis

Published on: 10:22AM Aug 17, 2010

Many traders and producers alike believe the soybean futures market may struggle in price compared to corn and wheat this fall, but you may be in for a big surprise as we are starting to see huge moves in the post-harvest soybean basis along the U.S. river system. In fact reports now show that Ohio River basis for Dec-Jan delivery posted at $.18 over January futures yesterday compared to their fall bid of $.19 under November futures, a return on storage of about $.43 (counting $.06 carry to Jan futures) for 6-8 weeks of storage. I have also read that the competing domestic processors in the area are only $.12 under January for Dec-Jan. All of this simply suggests that exporters are worried about getting enough soybeans to cover massive post-harvest sales to China. If you have access to the U.S. river system I suggest you call your local buyer and check these facts and conditions. For the rest of you just be patient and keep your eye on the basis in the coming weeks.