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What to watch for with basis during harvest

A grain marketer will be keeping a close eye on basis as the 2018 harvest ramps up.

Angie Setzer with Michigan-based Citizens Grain says local cash bids and grain movement will be telling in the weeks to come.

“I’m going to be watching the cash market more than anything.  Basis will give us an indication as to whether or not that grain is really flowing as expected.”

She tells Brownfield the latest USDA forecasts reinforce the expectation for supplies to balloon even more.

“Basis at this point in time is really going to be a function of trying to get as much value out of your storage space as you can get.  And the reality is (basis) is probably going to stay pretty wide until we find a way to kind of deplete the pipeline we currently have on hand.”

Setzer says the basis could be particularly wide in the Dakotas, northern Iowa, Minnesota, and parts of Wisconsin this fall.

“After all, we’ve seen the Pacific Northwest go to almost no bid.  There’s really no outlet for the oversupply that we have.”

Soybean basis has recently been as high as $2-dollars above November futures in western North Dakota.