Cash Market Disequilibrium for Corn

Kevin McNew

Dec 04, 2019

A challenging growing season may have not done enough to put a big dent in the U.S. corn supply, but it is having a big impact at the local level.

Parts of South Dakota and the Eastern Corn Belt with localized production shortfalls are seeing premium bids from end users that are causing grain to be pulled from unusual drawing regions.

The map below illustrates premium markets that are drawing from regions from which they normally do not get corn.

The blue lines represent low-priced regions where it is economically viable to truck grain to one of the premium markets at a profit. 


Challenging markets in 2019 provide limited upside here. Looking for ways to capture an extra 5 to 10 cents per bushel above hauling costs may be a prudent move for stored bushels. Basis levels are already trading at inflated values and probably won’t keep moving higher, so looking for near-term opportunities to capture the best return is a prudent move in FBN’s estimation.

Want access to more insights like this?

Our FBN Market Intelligence subscription delivers expert analysis, straightforward recommendations and local basis trend insights to better inform your approach to grain marketing. Sign up for a free 30-day trial today.

Copyright © 2019 FBN BR LLC. All rights Reserved. FBN Market Intelligence is distributed by FBN BR LLC. Contact877-472-4607for more information. For the purposes of quality assurance and compliance, phone calls to and from FBN BR LLC may be recorded.

We do not guarantee customers will receive specific benefits or value from participating in FBN BR LLC; results will vary. The data in this article is being supplied as a courtesy by FBN BR LLC. The risk of trading futures and options can be substantial and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This article contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by FBN BR LLC. Past performance is not necessarily indicative of future results.

Disclaimer: Futures and Option trading involves substantial risk, and may not be suitable for everyone. Trading should only be done with true risk capital. Past performance, either actual or hypothetical, is not necessarily indicative of future results.

Kevin McNew

Dec 04, 2019