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GeoGrain: Corn, Soybean Basis Move Higher

GeoGrain: Corn, Soybean Basis Move Higher

18 April 2014

US - Basis across the U.S improved for the week ending on the 16th with corn basis climbing 1 ½ cents higher and soybeans up 2 cents, according to grain analysts at GeoGrain.

GeoGrainTight stocks, strong soybean crush numbers and barge movement on the upper Mississippi river helped basis push higher going into the long weekend.

Basis along the river increased this week for both corn and soybeans as barge rates continue to decline. Soybean basis at river terminals showed relative strength by improving 5 cents this week. Most of the gains were observed along the middle and upper Mississippi river.

On April 14th Lake Pepin became open for barge traffic after ice melted enough to pass, and by later today (the 17th) the first towboat is expected to have transited Lake Pepin and arrive in St. Paul, MN. Last Saturday, at lock 27 on the Mississippi river there were 378 empty barges headed up river accompanied by another 105 barges carrying fertilizer.

Most of these barges will be loaded with grain to haul to the gulf for export. The new barge movement on the upper Mississippi river is likely to start bringing basis support to the upper plains

Soybean plants increased their basis 3 ¾ cents this week following a strong NOPA monthly crush report on Tuesday. For the month of March, US crushers used 153.8 MB which was above trade expectations of 146.1 MB going into the report. Some crushers boosted their basis sharply following the report, pushing basis to +50K or higher across much of the Midwest

Ethanol plant basis also improved this week by climbing 2 cents on strong crush margins. Weekly ethanol production released on Wednesday by EIA showed a strong 939,000 barrels per day, up 45,000 from last week and the highest weekly total since December.

GeoGrain Cash Basis 4-17-14

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