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Crop Basis Maps: 3-3-2004

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 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 May soybean futures contract closed at $9.43 on 3-3-04, up from last month (2-4-04) by $1.37/bu.  The Wednesday close was up from the same time last year by $3.75/bu.

Soybean Basis:  The average cash price across 350 locations in the Great Plains was $9.13, with a minimum price of $8.36 and a maximum of $9.51/bu.  Basis averaged -$0.297, with relatively stronger basis levels in Missouri, eastern Kansas, and eastern Nebraska.  Weaker basis levels appeared in western Kansas, as well as the Texas and Nebraska Panhandles.

Soybean Basis Deviation:  Current basis levels across central Kansas, are approximately the same as the three-year average basis levels, while northeast Kansas basis levels are about 5 cents stronger and southwest locations are about 6 cents weaker than the three year average.  Basis levels in Missouri and northeast Nebraska are slightly stronger than the historical average.  On average across all locations, basis levels were 3 cents stronger than the three-year historical average.

Soybean Basis	Soybean Basis Deviation
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Corn

Corn Futures:  The CBT May corn futures contract closed at $2.98 on 3-3-04, up from last month (2-4-04) by 28 cents.  The Wednesday close was up from the same time last year by 61 cents.

Corn Basis:  Cash prices averaged $2.80 across the 405 Great Plains locations and ranged from a high of $3.43 to a low of $2.40/bu.  Basis levels averaged -$0.183 and were the weakest in Nebraska, northern Missouri and eastern Kansas.  Southwest Kansas and the Texas Panhandle showed the strongest basis levels relative to other locations.

Corn Basis Deviation:  Basis levels in Missouri were stronger than the three-year historical average, while most of Nebraska and eastern Colorado were 6 to 7 cents weaker than previous levels.  Western Kansas was very close to historical average basis levels, while other portions of the state were 4 to 6 cents weaker. On average across all locations, basis levels were about 5 cents weaker 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 $3.81 on 3-3-04, which was the same closing price as last month (2-4-04).  The Wednesday close was up $0.41 from the same week last year.

Wheat Basis:  Cash prices averaged $3.50 across 309 locations in the Great Plains region.  The high cash price observed was $4.06 and the low price was $2.53/bu.  Basis levels averaged -$0.307 across all locations.  Relatively strong basis levels were seen in eastern Nebraska and south-east Kansas.  Kansas wheat basis levels averaged -$0.31/bu.

Wheat Basis Deviation:  Southeast Kansas basis levels  were slightly stronger than historical averages, while much of Nebraska and central Kansas showed basis levels that were weaker.  Basis levels averaged 15 cents weaker than the three-year historical average across all locations.

Wheat Basis	Wheat Basis Deviation
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Grain Sorghum

Corn Futures:  The CBT May corn futures contract closed at $2.98 on 3-3-04, up from last month (2-4-04) by 28 cents.  The Wednesday close was up from the same time last year by 61 cents.

Grain Sorghum Basis:  Cash prices averaged $2.67 across 285 locations and ranged from a high of $3.33 to a low of $1.95/bu.  Basis averaged -$0.315 across all locations included in the analysis.  Basis levels were weaker in most of Nebraska, north-central and southeastern Kansas, as well as western Missouri. 

Grain Sorghum Basis Deviation:  Basis levels in western Kansas were relatively stronger, while basis levels in Nebraska and portions of eastern Kansas were 10 to 13 cents weaker than the historical three-year average.  The basis levels observed this week averaged 9 cents weaker 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