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Illinois corn basis at record high levels for January

U of I ag economist Darrel Good says lack of farmer selling is pushing basis levels to record highs.
John Hawkins 
Published: Jan 23, 2012
Cash corn markets across Illinois are on fire this month spiking "basis" bids to levels not seen in four decades as farmers hold tight to their crops waiting for higher prices while export demand picks up, grain traders and analysts said.

Decatur cash corn bids are now at +28 cents over March Chicago corn futures.

"We have never seen cash bids over futures for the third week in January which we are seeing now," said University of Illinois economist Darrel Good, who has tracked 38 years of weekly USDA prices for country Illinois markets. "For the third week in January, about 5 under futures was the strongest we've ever been. That was back in January of 1991. We're at a penny over futures," said Good referring to last week's east central Illinois cash basis.

Meanwhile, the South American drought is creating additional problems for corn producers in Argentina.  A boat stranded since last week has delayed nearly 100 ships carrying grains and soy products at Argentina's biggest agricultural port, Rosario, a shipping industry official said on Monday.

"Navigation is totally obstructed today," Guillermo Wade, manager of the country's Port and Maritime Chamber, told Reuters.

Nearby futures contracts in Chicago are building in premium to the deferred months, suggesting farmers should sell crops now, analysts say. "I think they are in for a rude awakening if weather normalizes in 2012 and we get more corn acres," R.J. O"Brien's Rich Feltes said.



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