Due to another good production year for corn and soybeans, we have a large supply which means basis continues to be weak.
Trade uncertainty with China doesn’t seem to be helping matters since they are not buying beans from the U.S. due to tariffs. There has been some basis improvement since harvest is over in most places.
“The farmer has been a pretty reluctant seller at these prices,” said Aaron Curtis of MIDCO at this week’s Bank of Pontiac ag outlook meeting in Coal City. “As we move into the winter months, I think bean basis is going to continue to stay historically weak.”
Curtis feels there is hope for corn basis moving forward with a very good demand profile. He will closely watch the trade conversations with China to see if something can get addressed.
“Exports on corn are a little bit on the weak side recently but I think there’s an opportunity for those to pick up here as we move into the first of the year.”
We are approaching a time when we traditionally see higher prices after a bottom during November and December. The trend typically moves upward as spring approaches.
“I think we have to continue to watch margins and cost of production,” Curtis added.