Soybean basis moved higher this week through most parts of the country. The largest gains were seen along the Eastern seaboard, where many locations saw increases of more than five cents. Basis was also strong in the center of the country, with most of Missouri and Illinois gaining more than two and half cents. Basis was weaker in Northern Minnesota and Oklahoma.

Strong exports this week helped to boost basis at many locations. Export inspections were at 28.8 million bushels compared to analyst expectations of 23 to 26 million bushels. This week's surprise export numbers come on the heals of the March USDA supply and demand report, where export forecasts were cut by 10 million bushels. Analysts were expecting a cut twice that size. Cumulative shipments are now 72.4% of the USDA's export forecast. The five year average at this time is typically 76.5%. So unless we see several more weeks of strong exports, the analysts may win out and the USDA would be forced to cut exports again.

The true test of US soybean exports will come in the next few weeks as the South American harvest reaches completion. Currently 25% of the Brazilian harvest has been completed. As this number grows we can expect exports to slow.

Soybean deliveries to major terminals slowed this past week, with shipments down roughly 60% from the previous week. Slow sales over the past week pushed up basis. If cash sales remain low this week we may see basis move a few cents higher. However, there will be a number of producers scrambling to sell before the South American crop hits the market. Any rally in the futures market will increase sales even further. With higher cash sales we could see basis move sideways or even lower over the next week or two. If US producers start selling at the same time as the South American crop hits the market we could see basis give up more than a few cents.

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