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US Cash Grain Outlook: Corn, Soybean Basis Mixed85 days ago
KANSAS CITY (Dow Jones)--Corn basis is mostly steady to weak Monday morning, while soybean basis is trending mostly steady to firm in some U.S. locations, as wet weather makes its way across the corn belt.
Corn and soybean basis last week fell 3 1/2 cents for corn and 9 1/2 cents for soybeans, pressured by the advance in harvest. Basis may begin to consolidate as soaking rains and snow in some locations threaten to interrupt the harvest, a merchandiser said.
Despite the late start to harvest, weather conditions until today have been nearly ideal, said Iowa commodity trade adviser Karl Setzer.
"While it is doubtful enough has been done to reach an average pace, it is possible we could close in on last year's numbers. If this does take place, it will greatly reduce market concerns over possible yield loss," Setzer said.
The corn harvest is expected to be 50% complete as of Sunday.
The soybean harvest is expected to be 90% complete, and farmer selling has been light as producers concentrate on drying their beans and getting their corn out of the fields.
Higher barge freight rates have hit basis levels recently. Fewer barges have made their way north as the bulk of the harvest makes it way to river terminals, making it more costly to ship grain downriver.
Sluggish export demand remains a concern for the grain market, said Bryce Knorr, senior market analyst with Farm Futures. Buyers are seeking alternatives, he said, with Israel tendering for mixed feed grains expected to come from Europe.
Chicago Board of Trade grain and soybean futures are expected to open higher, underpinned by the supportive macro influences of a weak U.S. dollar and strength in the key crude oil, metals and equity markets. Strength also comes from the wet forecast for this week, slowing the harvest in the southwestern and eastern corn belt.
Corn is called 4-6 cents a bushel higher, wheat is seen up 5-7 cents and soybeans are expected to open 5-10 cents higher, traders said.
National cash price indexes maintained by the Minneapolis Grain Exchange stand at $9.28 1/4 for soybeans, reflecting an average basis of -64 cents relative to Friday's settlement of January CBOT futures. Domestic cash prices also average $3.53 1/4 for corn (-37 1/4 cents basis December CBOT), $4.56 3/4 for hard red winter wheat (-83 3/4 cents basis December KCBT wheat), $4.24 for soft red winter wheat (-$1.15 basis December CBOT wheat) and $5.52 1/4 for hard red spring wheat (-3 1/2 cents basis December MGE wheat).
Snow and rain from the southern part of the western Midwest through much of the eastern Midwest will further delay the summer crop harvests and winter crop planting this week. The outlook for next week is showing more rain or snow in the region, private forecaster DTN Meteorlogix said.
For the western corn belt, a chance of snow or rain changing to snow is seen Monday in the southwest, with rain or thunderstorms expected elsewhere in southern and east-central areas. Light to locally moderate snow and rain may linger in southern and central regions on Tuesday.
Southern Nebraska, most of Missouri and southern and eastern Iowa will likely see 0.50 to 1.50 inches of precipitation, with less than 0.25 inch elsewhere in Iowa and Nebraska, Meteorlogix said.
In the eastern belt, rainfall of 0.50 to 1.50 inches and locally heavier amounts are seen through most of Illinois and Indiana Monday or Tuesday. The rest of the region will see light to locally moderate rain Monday through Wednesday.
-By Tom Sellen, Dow Jones Newswires; 913-322-5177;
tom.sellen@dowjones.com
(END) Dow Jones Newswires
November 16, 2009 09:59 ET (14:59 GMT)
Crop Weather
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