MN guys..whats basis in your area?

Dave from MN · Sep 27, 2011

Bigger buyer here is -$.80 cash corn, -$.65 New crop corn.
Beans -$1.30

fixerupper · Sep 27, 2011

You have a real nasty basis. Here in my part of NW Iowa it's .40 on corn and .70 on beans. None of our corn leaves the area because of feed and ethanol and most of the beans are processed localy so that's probably why we have a lower basis. Jim

KYfarm · Sep 27, 2011

all right, I've never sold grain, so what does "basis" mean?

big jt · Sep 27, 2011

Corn and Soybean markets are all based on the Chicago Board of Trade (CBOT). Local Elevators need to adjust the price for handling and transportion charges. This adjustment is refered to as basis.

Basis changes throughout the year as the local need for grain changes. Right now the basis is at about it's widest as harvest is getting into full swing. Couple months ago in Fixerupper's and my area (we are about 15 miles apart) the basis was negative. This was due to the reasons Fixerupper already has explained. BTW we are on the far side of Iowa from Chigago.

jt

KYfarm · Sep 27, 2011

gotcha, thanks for the info.

If I'm understanding you correctly its the elevators profit margin for handling, storing and marketing. If there is high demand locally (i.e. ethanol plant) then the basis is very low. If they have to cover the cost for it to ride a barge all the way to New Orleans then the basis is high.

again, thanks

oh, by the way, did you guys know that the gov't still pay people NOT to grow grains. I receive approx. $600/year for corn and approx. $75/year for wheat. Actually i could grow as much as I want, but I'm not allowed to SELL any of it. Good thing I'm in the cattle market (I do grow corn to feed them)

what would I do without my ~$700/year (sarcasm)

John Diercks · Sep 27, 2011

Fixer,
where are you in NW IA? I have family in Storm Lake, and in Cherokee. Anywhere near?

NY 986 · Sep 27, 2011

Part of it is seasonal. Prices usually soften nationally and locally during harvest. I am sure the buyers are looking for a few guys to panic on the downward trend and sell so the buyer can make a quick buck. If this basis goes on most of the year then you don"t have enough local buyers in terms of your local basis.
We had a buyer in the area firm its presence in the area by buying a rail siding and adding storage volume to the facility this summer. That tightened up basis here significantly.

paul · Sep 27, 2011

Are you in a CRP program, otherwise don't know what you are talking about. Actually you can't plant CRP, so what program are you in?

You got the basis, those of us in grain over-supply areas get much less than CBOT prices, while those in areas that use grain but don't produce so much (Texas for cattle feed, eastern states for poulty/hog feed) often are paying more than CBOT price for grain.

--->Paul

KYfarm · Sep 27, 2011

I believe it is called DCP, farm has been getting this little payment for many, many years.

Even stayed attached to the property as I inherited it from my G'mother who signed up originally.

I am NOT locked into it, I re-sign every year at the FSC office. I have thought about selling some grains but without a combine and my need for hay there just isn't really any reason to change my routine now.

OliverGuy · Sep 27, 2011

That surprised me. Here in IN the basis is 5 cents on new corn and 55 cents on new beans. Ethanol plant 30 miles away is even on new corn.

John (C-IL) · Sep 27, 2011

I just looked it up, we are 12 cents on new crop and 7 cents for December. Be sure to check what month they are putting the basis to, i.e. is that basis to november or january contract?

MN guys..whats basis in your area?

Dave from MN

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fixerupper

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KYfarm

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big jt

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KYfarm

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John Diercks

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NY 986

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paul

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KYfarm

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OliverGuy

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John (C-IL)

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