Soybean Prices Soar in U.S. Interior Amid Weak Demand and Slack Country Movement

Strategic Insights -

Rising demand for farm products and a drop in farm selling have contributed to an increase in spot soybean prices in the U.S. interior. As of early Wednesday, interior cash soybean basis had risen by an average of around 1 cent across the U.S. interior, leaving gains at a total of about 4 cents for the week. The rally was partially fueled by the slow pace of country movement, with reported receipts of soybeans at Midwestern grain terminals tracking at only about two-thirds of week-earlier volume.

Key Takeaways:

  • Spot soybean prices in the U.S. interior soared amid weak demand and slack country movement, with interior cash soybean basis rising by an average of around 1 cent across the U.S. interior.
  • Reported receipts of soybeans at Midwestern grain terminals dropped to only about two-thirds of week-earlier volume, at 541,000 bushels on Wednesday.
  • Farmer selling has disappeared, with Phyllis Nystrom, a senior market analyst with Country Hedging Inc. of St. Paul, Minn., noting that "basis still firming at processors."
  • Cash corn movement increased again Wednesday, exceeding last week's daily average CBOT terminal pace by 41%.
  • Farm Progress market analyst Arlan Suderman stated that farmers are waiting for Thursday's USDA grain stocks/prospective planting reports for direction, but believe that Thursday's report will show whether these markets have more upside potential in the weeks ahead.
  • CIF corn basis currently stands about 1 1/2 cents lower than late last week, with Gulf premiums declining by 1 cent Wednesday.
  • Faltering foreign demand has dampened grain sorghum basis at the Louisiana Gulf this week, driving down milo premiums by 2-4 cents a bushel, despite a slight recovery Wednesday.