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Crops: Marketing

Crop Basis Maps: 10-1-2003

Mykel Taylor, K-State Ag. Economics (785-532-1572; mtaylor@agecon.ksu.edu)
Kevin Dhuyvetter, K-State Ag. Economics (785-532-3527; kcd@ksu.edu)

This monthly basis report provides a spatial analysis of crop basis in the Great Plains Region: Kansas, Nebraska, Missouri, Oklahoma, and parts of Colorado and Texas.  Basis is calculated by subtracting the nearby futures price from the cash price, where nearby is defined as the futures contract closest to expiration without going into the delivery month.  Basis captures the effects of local supply and demand, as well as transportation costs, on commodity prices. 

The maps in this report are created from cash and futures prices that are collected and analyzed on the first Wednesday of each month.  The basis maps in this report show current basis levels for soybeans, corn, wheat, and grain sorghum (grain sorghum basis is calculated using the corn futures market).  The basis deviation maps show the difference between the current basis and the three-year historical average basis for the same week and location. 

Cash price data were collected for 300-400 locations, depending on the crop, and the information was analyzed in a Geographic Information System (GIS).  Inverse distance methods were used to estimate the change in basis over space, which provides an estimate of the basis for observed and unobserved locations.  A flag on the map denotes a location where cash prices were available.  Care should be taken in interpreting basis estimates in portions of the Great Plains region where few or no cash prices were available.
 

Soybeans

Soybean Futures:  The CBT November soybean futures contract closed at $6.87 on 10-1-03, up from last month (9-3-03) by $1.06.  The Wednesday close was up from the same time last year by $1.49.

Soybean Basis:  The average cash price across 382 locations in the Great Plains was $6.48, with a minimum price of $6.15 and a maximum of $6.92.  Basis averaged -$0.393, with relatively stronger basis levels in Missouri and eastern Kansas.  Weaker basis levels appeared in western and central Kansas, as well as the Texas Panhandle.

Soybean Basis Deviation:  Current basis levels in central Kansas are weaker than the three-year average basis levels, while basis levels in Missouri averaged about 8 cents stronger than the historical average.  Other areas of the Great Plains region showed basis levels close to the three-year historical average. 

Soybean Basis	Soybean Basis Deviation
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Corn

Corn Futures:  The CBT December corn futures contract closed at $2.20 on 10-1-03, down from last month (9-3-03) by 24 cents.  The Wednesday close was down from the same time last year by 37 cents.

Corn Basis:  Cash prices averaged $2.08 across the 438 locations included and ranged from a high of $2.77 to a low of $1.80/bu.  Basis levels averaged -$0.131 and were the weakest in Nebraska and northwest Missouri.  Southwest Kansas and the Texas Panhandle showed the strongest basis levels.

Corn Basis Deviation:  Basis levels in Missouri were stronger than the three-year historical average, while most of Nebraska and eastern Colorado were weaker than previous levels.  Most of Kansas deviated very little from the historical average basis level.  On average across all locations, basis levels were 7 cents higher than the three-year historical average.

Corn Basis	Corn Basis Deviation
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Wheat

Wheat Futures:  The KCBT December wheat futures contract closed at $3.62 on 10-1-03, down 6 cents from last month (9-3-03).  The Wednesday close was down $1.12 from this same time last year.

Wheat Basis:  Cash prices averaged $3.28 across 336 locations in the Great Plains region.  The high cash price observed was $3.78 and the low price was $2.67.  Basis levels averaged -$0.343 over all locations.  Eastern Nebraska showed basis levels that were strong relative to western Nebraska.  Kansas wheat basis levels averaged -$0.35, while basis levels in eastern Colorado were weaker with an average of -$0.42.

Wheat Basis Deviation:  Central Nebraska basis levels were stronger than historical averages, while western Nebraska and eastern Colorado basis levels were weaker.  Basis levels averaged about 8 cents under the three-year historical average across all locations.

Wheat Basis	Wheat Basis Deviation
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Grain Sorghum

Corn Futures:  The CBT December corn futures contract closed at $2.20 on 10-1-03, down from last month (9-3-03) by 24 cents.  The Wednesday close was down from the same time last year by 37 cents.

Grain Sorghum Basis:  Cash prices averaged $1.97 across 308 locations and ranged from a high of $2.66 to a low of $1.50/bu.  Basis averaged -$0.235 across all locations included in the analysis.  Central and northwest Kansas basis levels were relatively weak compared to other parts of the state.  Central Nebraska and some locations in Missouri also had relatively weak basis levels.

Grain Sorghum Basis Deviation:  Basis levels in central Kansas and Nebraska were stronger than the historical three-year average, while basis levels in Missouri and eastern Kansas were very strong compared to previous levels.  The basis levels observed this week averaged 5 cents above than the three-year historical average across all locations.

Grain Sorghum Basis	Grain Sorghum Basis Deviation
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Crop Basis Maps Funded By:	Links:	Montana State University Monthly Spatial Basis Report