Over the past month, cash grain markets have been moving against the seasonal trend.
New research from Purdue University shows corn and soybean basis levels strengthened across much of the Eastern Corn Belt during June, when basis typically weakens as supplies remain available and new crop expectations grow.
Josh Strine, a graduate research assistant in agricultural economics at Purdue University, says corn basis against the July futures contract strengthened in 38 of the 40 crop reporting districts tracked across the region.
He said, “The defining feature of the current basis map is the increasing basis from west to east. In Ohio, corn basis is running well above the three-year historical average across every tracked district. Northeast Ohio is the most extreme example. Basis in the district is currently even with July futures and 27 cents above the historical average for this time of year. Indiana is broadly above the historical averages as well, with many districts carrying positive or near even corn basis.”
And with soybeans, Strine says basis held steady or strengthened across all tracked districts.
“In Indiana, basis is just two cents below July futures and well above the historical average. Michigan has the strongest soybean basis relative to historical averages in the region. Southeast and West Central Michigan are both running 30 cents or more above their two-year averages. Basis in these districts remains negative in absolute terms, around 10 to 20 cents per bushel below July futures.” He added.
For farmers with grain still in storage, the stronger basis has created opportunities to improve cash prices without relying solely on futures market gains. Strine says basis will continue to be a key factor to watch as the market shifts its focus toward the size of this year’s harvest.
See Josh Strine’s full report here:
