Tight supplies buoy cash corn basis

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The threat of U.S. corn supplies staying tight throughout the summer and solid domestic and export demand underpinned cash corn basis levels.

End users such as processors and ethanol plants in the eastern Midwest continue to raise purchase bids in an attempt to lure supplies out of strong commercial hands. Farmers remain reluctant sellers ahead of possible higher prices. Production this year is uncertain due to planting issues across the eastern Midwest, with planting progress in corn and soybeans lagging well behind historical averages in Indiana and Ohio.

Processors and ethanol plants remain the highest bids in interior markets, with spot corn basis bids at selected ethanol plants in the eastern Midwest ranging from 8 cents under to 40 cents over July CBOT corn futures, according to data from U.S. Department of Agriculture.

Commercial grain elevators are keeping bids firm for corn in an attempt to secure grain amid the potential for less available supplies from eastern corn-belt areas.

Commercial inventories of U.S. cash grain held steady last week. Elevators, terminals, ports and warehouses surveyed by the USDA were filled to 51% of holding capacity, unchanged from the previous week.

The thinning of supplies at the Louisiana Gulf are supporting basis bids on the river, as exporters look to restock inventories drawn down after high water levels on the Mississippi River stalled some grain movement in recent weeks.

U.S. Gulf midday barge freight basis for spot corn bids ranged from 48 cents to 67 cents over July futures for June delivery, up 1 cent from Tuesday. Soybean bids ranged from 48 cents to 82 cents over July CBOT futures for June delivery, unchanged from Tuesday, and soft red winter wheat bids ranged from 50 cents to 80 cents over July CBOT futures for June delivery, unchanged from Tuesday, according to USDA.

The Telvent DTN weather forecast calls for a hotter and drier Midwest trend. This pattern may help improve conditions for planting corn and soybeans and for reproductive to filling winter wheat through the eastern Midwest region.

Across the Northern Plains, warmer temperatures and somewhat less rainfall may help improve conditions for planting and emergence during the next week or more, Telvent said. However this is still a near- to above-normal rainfall pattern, especially in the west and northeast areas, Telvent added.

 



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