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A key component of marketing stored grain is monitoring local basis and understanding the seasonal components of basis. Figure 1 and Figure 2 show the monthly average corn and soybean spot basis, respectively, for 12 Western Kentucky markets. Notice that basis tends to follow seasonal patterns with the widest level at harvest with appreciation into spring and early summer.
Grain markets this fall are suggesting producers should store their corn and soybeans. The question is whether storage is going to pay off.
The August and September Crop Production reports disappointed market bulls as expectations were that a less than perfect growing season would produce trend-line or below-trend yields. The potential of a smaller crop would then allow stocks to decline and provided a needed boost to market prices.
The Kentucky Soybean Board partnered with the University of Kentucky College of Agriculture, Food and Environment to develop an app to help soybean producers accurately calculate and compare the price offered by elevators, with consideration to delivery costs and high-moisture penalties for harvested grain.
High corn and soybean yields, a large carryover from 2016 and transportation challenges have combined to put pressure on grain markets this fall. Many farmers are looking at every available storage option.
The U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) released the August Crop Production report today, showing the soybean production is forecast to be 10 percent higher than 2016. Corn and hay production reports also available.