Corn Basis Weaksens, Soybeans Gain in Eastern Corn Belt

Corn basis weakened across much of the eastern Corn Belt in August, but soybean basis told a different story. According to Josh Strine, postdoctoral research assistant and agricultural economist at the Center for Commercial Agriculture at Purdue University, corn basis fell by as much as 27 cents per bushel across the eastern Corn Belt, with gains limited to just 5 cents.

The broad corn weakening ended a trend of gains that had persisted through the summer. However, Iowa, which had trailed the rest of the region for most of the year, saw some positive movement in August, gaining ground in both corn and soybeans.

Basis is an important indicator of current local demand. It's the difference between a local cash price and the relevant futures contract price for a specific time period. In this case, basis weakened the most in southeast Indiana, where it fell by 27 cents per bushel to reach negative 32 cents.