Harvest Season Brings Record Basis Drops for Corn and Soybeans

As the harvest season kicks off, corn and soybean basis levels have seen significant declines. Since early September, corn basis has dropped by up to 25 cents per bushel, while soybean basis has fallen by as much as 43 cents per bushel. Josh Strine, a postdoctoral research assistant and agricultural economist at Purdue University, notes that these changes reveal broader market trends.

The strongest corn basis is currently found in central Indiana and Ohio, where levels are above their three-year averages. In contrast, Iowa and Illinois are experiencing weaker basis, with southeast Iowa hitting record lows for this time of year. Strine attributes these variations to differences in production forecasts and regional demand, particularly from ethanol plants in Ohio.

Harvest timing also plays a crucial role. Illinois, which is ahead of its normal harvest pace, has seen some of the largest basis decreases, particularly in southeast Illinois. Meanwhile, Iowa has bucked the trend with a strengthening basis across all districts, led by northwest Iowa.

For soybeans, the basis has weakened across nearly the entire region, except for two districts. Despite this, soybean basis remains above historical averages in most areas, likely due to strong demand from processors in Ohio and Iowa. Looking ahead, Strine predicts more volatility, with corn basis potentially hitting its seasonal low in mid-October, while soybeans may already be recovering.