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28 May 2008 13:22 EDT DJ MARKET TALK: New-Crop Basis Weaker On Corn, Stonger On Beans
1320 EDT [Dow Jones] - Basis levels for new-crop delivery have been mostly stable, with corn slightly weaker and soybeans up an average of 2 cents higher over the past month, says Kevin McNew in a Cash Grain Bids research note. "Soybean futures have seen solid gains for new-crop delivery," while new-crop corn basis lost an average of 1 cent a bushel weaker in the last 30 days. McNew says areas in the Southern grain belt lost 2 or more cents a bushel, while the Texas Panhandle has "seen some strong gains in corn basis as new ethanol construction begins to come online." He adds that "notable exceptions" are occurring around key river markets, as barge rates for deferred delivery continue to inch higher putting pressure on new-crop corn and bean bids. "On the Upper Mississippi River, barge rates for fall delivery have gained about 8 cents a bushel in the last month," McNew says. "Also, they continue to trade at elevated levels compared to norms. Current forward barge rates are trading about 20 cents a bushel higher than the five-year average for fall delivery." CIF basis is currently up 1 cent for nearby soybeans, holding steady for wheat, and is down 4 cents on nearby corn. (RXT)
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