Cash Strategist 11-22-2023
Last year marked a fairly unusual flow of grain from east to west. The drought in the western states forced the need for end users to pull more grain from the eastern states than what is typically seen.
Illinois is the main barometer for grain flows, as grain from the state can move in a multitude of directions. Rail lines out of Illinois heading west and southwest saw their biggest level of activity in years to meet the corn deficit that livestock producers and ethanol plants faced last year. Basis levels in Illinois were elevated above historical norms due to this untraditional flow of grain.
This also helped keep basis levels at other markets in the east inflated, as end users were forced to compete against western rail markets.
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