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GeoGrain: Basis for Spot Corn Delivery Up Three Cents Last Week

20 May 2012

US - Basis for spot corn delivery has continued to strengthen across the country, up three cents in the last week.

With the average spot basis sitting 12 cents above the July contract, we now see basis 49 cents stronger than this time last year. The futures market has struggled to give producers an incentive to sell old crop corn, with July futures trading sideways over the last several months and many producers waiting for a spring rally in corn futures to sell their remaining bushels. As a result, elevators have been trying to make up ground by strengthening basis for spot corn delivered in May to 10 year highs.

We are seeing a similar story develop for new crop corn deliveries, which strengthened one cent over the last week. On average, basis for harvest delivery is sitting 38 cents under the December contract, 17 cents stronger than what we saw last year at this time. With the USDA projecting 95.9 million of acres of corn at 166 bushels per acre, new crop corn should be abundant come October if we do not run into a major weather event over the summer. With this in mind it may be prudent to capture this seasonally strong basis with a portion of new crop bushels.

The cash market for soybeans remains seasonally strong, but not nearly to the degree we see cash corn basis. Basis for spot delivered soybeans strengthened three cents over the week, and is now sitting at 45 cents below the July contract. A five cent increase out of the Gulf and a seven cent increase among river terminals supported the gains seen across the country this week. The sharp drop in soybean futures and diminishing cash sales also made room for basis increases over the last seven days. New crop basis had a quiet week, moving up one cent to 46 cents under the November contract.

Both the cash corn and soybean markets have made steady gains in recent weeks, but keep an eye on domestic weather conditions and production projections as these will give direction to these markets as we move through the summer.

To learn more about GeoGrain’s cash market intelligence dial 1-866-290-1196 or visit us online at

TheCropSite News Desk

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