See national chem pricing trends in the FBN Research report
The US average spot corn basis calculated off the December ‘24 contract has been weakening over the last 43 days after it peaked around July 10th. In the last 7 days spot corn basis calculated this way slipped 5.4 cents with Sep24-Dec24 spread accounting for 3.7 cents of it. Calculating spot basis off the new crop futures removes the choppiness of rolling futures months throughout the marketing year and gives a relative comparison of spot cash prices compared to the coming new crop benchmark. The key takeaway from this chart is that spot corn basis compared to the Dec ‘24 futures contract peaked on July 10th and has been in a steady decline ever since. With no significant crop production scares on the horizon we would expect this trend to continue which is in line with the 10 year average trend. This would suggest that any old crop bushels in storage should be addressed sooner rather than later.
The map below shows the two week change in spot corn basis calculated off the September ‘24 futures by county. Over the last two weeks we have seen a broad decline in basis with the largest declines being located around the river markets.
The US national spot soybean basis average calculated off the November ‘24 futures contract has also been in decline since it peaked in mid July. During that time frame it has declined 50.83 cents with the seasonal average pointing to further declines by the end of the crop marketing year. Although many farmers may be reluctant to sell any remaining old crop inventories without a bounce in futures prices, it may be prudent to sweep the bins and re-own on the board rather than holding onto the physical bushels.
The map below shows the two week change in spot soybean basis calculated off the September ‘24 futures contract and displays the changes by county. Over the last two weeks we have seen a substantial decline in basis with the biggest declines being in South Central Iowa, Northern Illinois and along the Mississippi River.
This week, the corn markets have shown some short-term stability. The USDA's anticipated record high yields for the fall may already factored into prices. December corn has found technical support around the $3.90 mark and has gained a few cents since.
The Pro Farmer crop tour is underway, with final results due Thursday. Early results from rain-soaked South Dakota have been disappointing, but data from Nebraska, Ohio, and Indiana have met the high expectations. It’s important to note that this tour samples small areas in each state and does not predict statewide yields. Its value lies in its consistent routes each year, allowing for year-over-year comparisons.
Low global corn prices may lead South American farmers to reduce their corn planting for the upcoming season. The Buenos Aires Grain Exchange forecasts a 17% decrease in Argentina's corn acreage, projecting 6.3 million hectares.
Ethanol production has increased this week, raising stock levels as well. We are closely monitoring ethanol production and export sales, as high levels of both are crucial to reducing carryout numbers.
This week we have seen strong export demand, particularly from China. The USDA reported flash sales of 132,000 tonnes to China and 121,000 tonnes to undisclosed destinations, marking the third consecutive day of significant sales. These sales have brought the week's total to 1 million tonnes, underscoring robust global demand for U.S. soybeans. Despite this, the market weakened on U.S. crop conditions, as the Pro Farmer Crop Tour revealed above-average pod counts in key states like Indiana, Illinois and Nebraska.
On Wednesday, the tour's findings suggest the USDA's record yield projections might hold, putting a ceiling on price increases. Additionally, soybean product markets showed mixed performances, with soyoil futures up 0.71% and soymeal remaining stable. Argentina's soybean crushing surged by 71.7% year-over-year in July, highlighting robust processing activity, which may add pressure to global supply dynamics. Meanwhile, global FOB premiums remained relatively stable, with slight increases in the U.S. Gulf and Pacific Northwest hubs, reflecting steady demand.
China continues to purchase significant volumes from both Brazil and the U.S., further supporting the market. Looking ahead, the soybean market remains poised between strong export demand and the potential for large U.S. harvests. The upcoming U.S. harvest and subsequent yield reports will be crucial in determining the market’s direction, as traders balance the bullish demand outlook with the possibility of increased supply. The market may see continued volatility as it awaits more concrete data from the field, with potential for further price adjustments as the harvest progresses.
Poor price action midweek saw weakness across all 3 wheat classes. Matif Wheat also saw new interim lows heading into September delivery at the end of next week. Canada rail strike looks to impact a wide range of businesses as both major Canadian freight railroads could stop moving Thursday morning. Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) employ nearly 9,300 workers and ship about 75% of exports to the US.
(Click here to read more about what the Canadian rail strike means to farmers)
Export Sales were reported on Thursday: 492,700mt up 45% from the week before. Philippines, Mexico and Vietnam were top buyers. South Korea wheat tender purchased 50,000mt of US Wheat that will show up on next week’s export sales report. Ukraine Ag Ministry looks to set export limits of wheat at 15.2 mmt while the president of the Ukrainian Grain Association (UGA) suggests setting the 17mmt. USDA is forecasting Ukraine wheat exports at 14mmt. Another round of talks is slated for August 26th to finalize the amount.
Russian spring wheat areas continue to see rain impacting harvest and quality. Reuters reported a drone attack on Moscow on Wednesday, after the close of trade. Reports of 45 drones were shot down (11 in Moscow) with no damages or casualties being reported. Ukraine military advancement into the Kursk region estimates they have captured at least 450-1000 square km inside of Russia territory.
Dry weather in Argentina is hurting wheat ratings, but there is some rain in the forecast in 2 weeks. Meanwhile, Australia is experiencing a successful growing season, which should compensate for losses in South America.
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