Commentary by
Kevin McNew

Corn and Soybean Futures

  

Corn and Soybean futures continued to climb on Monday after a week of solid gains. Corn is up nearly 25 cents from the beginning of last week, reaching highs not seen since the middle of March. Weather concerns continue to affect the crop, as this week's forecast is for more warm dry weather, with any chance of rain likely to miss the driest areas. Strength in the soybean market is also lending support.

Corn basis dropped slightly this past week as futures rose. Most locations saw a decline of 1 cent, however, Illinois which has had a strong basis prior to this point gave up 2 to 4 cents at several of the key markets listed below.

Basis has slid over the past month, putting current basis levels significantly below last year's levels. The Gulf is one of the few markets where basis is near last year's levels. Basis at the Gulf is holding up despite lagging exports. Export inspections were up 9 million bushels this week but are still trailing last year's numbers by 120 million bushels. Lower ocean rates are likely buoying Gulf basis.

 
Corn Basis For Select Markets
 
City
State
Current
One Week Ago
One Year Ago
Clinton
IA
-11
-8
3
Davenport
IA
-16
-16
-2
Eddyville
IA
-26
-26
-2
Bloomington
IL
-14
-12
-6
Mendota
IL
-16
-12
-7
Pekin
IL
-11
-7
-3
South Bend
IN
-8
-12
-5
Gulf
LA
24
26
26
Marshall
MN
-31
-30
-8
Columbus
NE
-24
-23
-9
Toledo
OH
-17
-16
-6
Big Stone City
SD
-36
-35
-16
Chancellor
SD
-24
-30
-13


Soybeans are up 65 cents in this past week. Weather concerns in Illinois seem reasonable as the soybean good/excellent crop score fell 6 percent this past week, and more dry weather is forecasted for the coming week. Minnesota also saw good and excellent scores fall 3%. Meanwhile scores improved 2% in Iowa and 3% in Indiana with Iowa emergence now at 99%. Traders were expecting a 1 to 2 cent overall improvement which is what they got. With many eyes now on Illinois this weeks report will likely lend support to bullish traders focusing on drought conditions.

Soybean basis slipped over the past week at most locations, which is to be expected considering the strength in the futures markets. High futures prices are pulling grain out of farmers bins. A few select markets were higher or unchanged this past week. Raleigh and Toledo continues unchanged, with basis of 20 cents and -7 cents a bushel respectively. Basis was also strong in Nebraska where Lincoln gained a penny this week and Hastings gained 3 cents.

If futures continue to trend upwards expect basis at the markets listed below to give up another 1 to 4 cents in the coming week. Smaller facilities and country elevators will likely see an even larger decrease.

 

 
Soybean Basis For Select Markets
 
City
State
Current
One Week Ago
One Month Ago
Cedar Rapids
IA
-21
-20
6
Davenport
IA
-16
-12
23
Galesburg
IL

-13

-16

12

Quincy
IL
-8
-3

31

Gulf
LA

30

34

57

Zeeland
MI

-15
-15
51
Mankato
MN
-21
-17
26
Raleigh
NC

20

20
Hastings
NE
-10
-13
4
Lincon

NE

-3

-4

12

Toledo

OH

-7

-7

15

Volga
SD

-22
-18

-3

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