The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Solid gains in cash basis found their way thru much of the Midwest as corn and soy basis levels were up a robust 2 cents a bushel on the week.
Corn got a shot in the arm thanks to falling barge freight and a spike on quick ship premiums out of the Gulf. Upstream river terminals moved the needle higher by 6 cents on basis this week as a result. Corn processors were also higher, although as a group more muted with only a 2-cent advance on the week. Gains of 5 to 10 cents on basis were fairly widespread especially in the WCB and Upper Plains this week.
For beans the Gulf market was mostly unchanged this week and river terminals inched up bids on weaker barge freight, posting a 2-cent advance. Soy plants were up as well by 2 cents. Exceptionally strong crush margins should continue to keep an incentive for plants to keep inching basis up to keep pipeline supplies full.
Active farmer planting should keep basis levels holding firm into mid-May. And with corn shipments expected to be strong to handle the backlog of forward sales, this should keep end users active on basis.
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