Corn and soybean basis holding at heavy supply year levels.

In February and early-March Allendale discussed the differentiation in basis between heavy supply years and tight supply years. In heavy supply years basis typically does not continue gains into summer that were noted in the spring. Given a potential sideways basis, and high interest rates this would suggest a potential need to move old crop cash corn and soybeans and conduct paper re-ownership if supportive price views are still held.

Corn basis has followed the plan relatively well. Current Central Illinois basis is now -19 cents. That is equal with the -19 cents noted in the average of heavy supply years. In tighter supply years mid-May on out is when there is differentiation.

Soybean basis since March has generally been in the middle of the two stories. Recent levels widened back out to -28 ½ cents, slighty worse than the -27 cent average of heavy supply years. Mid-May is the timing where clear differentiation is normally seen.

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