Now that harvest is upon us in the United States, we will start to see some changes in the commodity market.
For one, we start to see more interest in basis values. Historically, buyers back off their basis values once harvest begins and new-crop bushels become available.
In recent weeks, basis values have become mixed, though, with firmer bids in the eastern Corn Belt than the west. Crops aren't as favorable in the eastern belt, and farmers aren't forward contracting as many bushels as in the west.
We have also seen elevated country movement up to this point in the west, further stressing basis values.
Not only does this year’s crop appear to be slightly lower than average in the eastern Corn Belt, but this makes the second year of poor crops for some farmers. This means that storage facilities are mostly cleaned out and the farmer has no need to move commodities during the harvest season.
This can end up being a benefit for ...