By Jon Scheve, Superior Feed Ingredients, LLC
Corn futures continue to trend sideways, as the market waits for the Aug. 12 USDA yield estimate. This week saw the first fields of the 2021 corn harvest begin in several southern states.
As a result of harvest beginning in the South basis values will come under pressure. Old crop corn basis levels have been dropping over the last few weeks, but many basis bids throughout the U.S. still hover around +60 to +70. During the middle of harvest most of these same locations will likely be bidding -40 to -30. This means there will likely be a $1 per bushel decrease in basis values between now and the end of September regardless of what futures prices do. While this drop is likely slow for the next week or two it will begin to drop rapidly as the harvest pushes northward.
This past week the Gulf barge market, which is the most widely traded basis in the country, had bids and offers as wide as 60 cents.… Continue readingRead More »