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Grain Weekly Analysis November 17, 2009

Good progress for corn harvest this week kept basis levels under pressure. On average, farmers harvested 17% of the corn crop last week, which helped lower U.S. average corn basis by 3 cents a bushel. In soybeans, where the crop is nearly 90% harvested, basis levels were mostly unchanged.
Although the corn market saw strong harvest pressure at most country elevators, along river terminals barge rates fell sharply helping lift basis levels by 20 to 30 cents a bushel over the last week. Weakness in basis levels was especially pronounced in the Western Cornbelt and Northern Plains were harvest levels started to pickup. Ethanol plants as a group were off 5 cents for corn basis this week.



 
 
In the soybean market, basis levels were unchanged on average but some lingering harvest impacts were still readily apparent in the Western Cornbelt and Northern Plains, but lower barge rates helped mute harvest weakness in the Eastern Cornbelt.
 


 
Harvest pressure for beans should be coming to an end and expect basis levels to start to stabilize and move higher. However, carry in the bean market is mostly non-existent so storing beans on basis could be a dicey proposition. For corn, basis levels could see another one to two weeks of harvest pressure but should start to firm once we get into December. Carry is strong for corn, with ample opportunities to lock in positive storage returns out to the summer.
 

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