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Crops: Marketing

Crop Basis Maps: 12-15-2004

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 third 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 Jan 05 soybean futures contract closed at $5.46 on 12-15-04, down from last month (11-17-04) by $.07/bu.  The Wednesday close was down from the same time last year by $2.23/bu.

Soybean Basis:  The average cash price across 377 locations in the Great Plains was $5.09, with a minimum price of $4.55 and a maximum of $5.78/bu.  Basis averaged -$0.36, with much stronger basis levels in Missouri. Southeastern Kansas, eastern Nebraska and eastern Oklahoma were slightly above average.  Weaker basis levels appeared in the  western portion of the Great Plains.

Soybean Basis Deviation:  Current basis levels across the Oklahoma Panhandle, north central and western Kansas are as much as 10 cents weaker than the three-year average basis levels.  Basis levels in much of Missouri, eastern Oklahoma, north east Nebraska, and  southeast Kansas are 1 to 3 cents stronger than the three year average.  On average across all locations, basis levels are almost 4 cents weaker than the three-year historical average.

Soybean Basis	Soybean Basis Deviation
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Corn

Corn Futures:  The CBT March 05 corn futures contract closed at $2.05 on 12-15-04, down from last month (11-17-04) by $.01/bu.  The Wednesday close was down from the same time last year by 47 cents.

Corn Basis:  Cash prices averaged $1.79 across the 439 Great Plains locations and ranged from a high of $2.61 to a low of $1.50/bu.  Basis levels averaged -$0.27 and were the weakest in Nebraska, northern and eastern Kansas and most of Missouri.  Southwest Kansas, eastern Colorado,  and the Oklahoma/Texas  Panhandle showed the strongest basis levels relative to other locations.

Corn Basis Deviation:  On average ,across all locations, basis levels were about 15 cents weaker than the three-year historical average.  This was seen  scattered across the Great Plains.  Basis levels in eastern Missouri were stronger than the three-year historical average by as much as 15 cents.  Eastern Nebraska and northeastern Kansas were about 2 cents weaker while much of the Oklahoma and Texas the panhandle were about 3 to 5 cents stronger than historical average basis levels.

Corn Basis	Corn Basis Deviation
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Wheat

Wheat Futures:  The KCBT March 05 wheat futures contract closed at $3.39 on 12-15-04, down from last month (11-17-04) by 19 cents.  The Wednesday close was down $0.52 from the same week last year.

Wheat Basis:  Cash prices averaged $3.24 across 355 locations in the Great Plains region.  The high cash price observed was $3.80 and the low price was $2.698/bu.  Basis levels averaged -$0.15 across all locations.  Stronger basis levels were seen in eastern Kansas, eastern Oklahoma and portions of Colorado, while the Oklahoma/Texas panhandles, most of Nebraska and western Kansas basis levels were weaker.

Wheat Basis Deviation:  Most of eastern Kansas basis levels  were slightly stronger than historical averages, while much of Nebraska and northern Kansas showed basis levels that ranged from 1 to 5 cents weaker than the three year historic average.  Basis levels averaged 1 cent stronger than the three-year historical average across all locations.

Wheat Basis	Wheat Basis Deviation
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Grain Sorghum

Corn Futures:  The CBT March 05 corn futures contract closed at $2.05 on 12-15-04, down from last month (11-17-04) by $.01/bu.  The Wednesday close was down from the same time last year by 47 cents.

Grain Sorghum Basis:  Cash prices averaged $1.57 across 318 locations and ranged from a high of $2.10 to a low of $1.04/bu.  Basis averaged -$0.48 across all locations but eastern Missouri, Colorado, Texas faired better.  Basis levels were weaker in western Missouri, most of Kansas and Nebraska.

Grain Sorghum Basis Deviation:  The basis levels observed this week averaged 31 cents weaker than the three-year historical average across all locations.  The Great Plains were fairly split between eastern and western portions, with the west showing stronger levels than the east.  Basis levels in the Oklahoma/Texas panhandle, eastern Colorado and western Kansas were 18 to 21 cents weaker than the historical three-year average.

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