With those large purchases comes strong basis, and that is what we have been seeing in the Pacific Northwest market. At the beginning of September, the track PNW shuttle basis was at $1.08 over the December contract for October and $1.12 over the December contract for November. By the middle of the month, the November basis was at $1.15 over the December contract and as of Friday, Sept. 25, that basis was at $1.18 over the December contract. Given this strong basis, farmers in northern Midwest are seeing stronger than normal basis levels for this time of year.
Matthew Krueger, who farms in East Grand Forks, Minnesota, told me last week that, "Our corn basis was around 40 cents under the December contract, and typically this time of year we've been seeing the corn basis more like 70 cents to 80 cents under the December contract. There are great opportunities for growers this year with the rally and strong basis to squeeze some profit out of the market." That strength in basis levels bid to farmers is to entice them to sell corn to shuttle loaders who feed the PNW market.
The story is similar in the central U.S. where corn basis has spiked in areas where ethanol plants need spot corn to grind and end users need to cover commitments.
Matt Wiegand, FuturesOne commodity broker in Lincoln, Nebraska, said, "Corn basis hasn't really started to see much harvest pressure yet, with more of a focus on early soybeans so far, which is where we are seeing some of the early weakness, with some areas getting behind on train loading to start in the good yielding areas. Prior to that, the better ethanol margins helped to prop corn up. I'd say basis in my area is about 5 cents to 10 cents better for corn at this time."
In the Eastern Corn Belt, there are reports that basis levels in some spots are 20 cents to 30 cents stronger than normal, and this as harvest has started there. On top of that, end users are offering a break in drying charges, free delayed price contracts and some have been playing "name your price" to try and entice cash corn to move.
The cash corn price in the U.S remains strong for this time of year as recent exports sales and demand from end users, along with slow farmer selling, is keeping the price solid. We may see harvest pressure on the futures, but I think that with all the recent export business and domestic needs, the basis is going to likely stay above the DTN five-year average where it ended the old crop year and where it still is.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
© (c) Copyright 2020 DTN, LLC. All rights reserved.
The Link LonkSeptember 28, 2020 at 11:19PM
https://ift.tt/30xQScf
Corn Basis Continues to Strengthen Into New-Crop Year - DTN The Progressive Farmer
https://ift.tt/3gguREe
Corn
No comments:
Post a Comment