Basis Levels for Corn and Soybeans Steady Ahead of Market Open

Strategic Insights -

As the futures market for corn, soybeans, and wheat prepared to open on Tuesday, basis levels for corn and soybeans remained steady to firm. According to the Minneapolis Grain Exchange national index, corn basis averaged a slight increase of 1/2 cent per bushel, while soybean basis firmed by 3/4 cent. Meanwhile, soft red winter wheat basis strengthened by 1 1/2 cents, hard red winter firmed by 3/4 cent, and hard red spring weakened by just 1/2 cent. These developments came as Asian soybean rust continued to spread across the southern United States, with 10 new counties in Alabama confirmed to be affected.

Key Takeaways:

  • The basis levels for corn and soybeans remained steady to firm ahead of the market open, with corn basis averaging a 1/2 cent per bushel increase and soybean basis firming by 3/4 cent.
  • Soft red winter wheat basis strengthened by 1 1/2 cents, while hard red winter firmed by 3/4 cent and hard red spring weakened by 1/2 cent.
  • Asian soybean rust has been confirmed in 10 new counties in Alabama, bringing the total number of infected counties in the state to 26.
  • The U.S. soybean harvest is wrapping up, with 87% of the crop harvested by the previous Sunday, up from 78% at the same time last year and the five-year average of 79%.
  • The U.S. corn crop is 65% harvested, compared to 53% last year and the 62% five-year average.
  • The U.S. winter wheat crop is 86% planted as of October 23, up two percentage points from last year, with Kansas being 91% planted.

Statistics:

  • Farm basis levels:

+ Corn basis: +0.5 cents (avg.)

+ Soybean basis: +0.75 cents (avg.)

+ Soft red winter wheat basis: +1.5 cents

+ Hard red winter wheat basis: +0.75 cents

+ Hard red spring wheat basis: -0.5 cents

  • U.S. soybean harvest progress: 87% harvested by October 23 (previous year: 78%, 5-year average: 79%)
  • U.S. corn harvest progress: 65% harvested by October 23 (previous year: 53%, 5-year average: 62%)
  • U.S. winter wheat crop planted: 86% (Oct 23), +2% from last year (same date last year: 84%)
  • Weather forecast for the next week:

+ Western corn belt: dry Tuesday through Friday, scattered showers developing Saturday into Sunday

+ Eastern belt: few light showers Tuesday, mostly dry conditions Wednesday through Saturday, scattered showers developing Sunday or Monday

Sources:

  • Dow Jones Commodities News via Comtex (Oct 25, 2005)
  • Minneapolis Grain Exchange national index (Oct 25, 2005)
  • U.S. Department of Agriculture (Oct 24, 2005)
  • DTN Meteorlogix (Oct 25, 2005)
  • Dow Jones Newswires (Oct 25, 2005)