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Crop Basis Maps: 11-17-2004

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 $5.53 on 11-17-04, down from last month (10-20-04) by $.23/bu.  The Wednesday close was down from the same time last year by $1.96/bu.

Soybean Basis:  The average cash price across 347 locations in the Great Plains was $5.10, with a minimum price of $4.50 and a maximum of $5.74/bu.  Basis averaged -$0.42, with relatively stronger basis levels in eastern Missouri, eastern Kansas, and eastern Oklahoma.  Weaker basis levels appeared in western Kansas, as well as the Texas and Nebraska Panhandles.

Soybean Basis Deviation:  Current basis levels across much of Kansas are approximately 10 to 20 cents weaker than the three-year average basis levels.  Basis levels in eastern Missouri, eastern Oklahoma, most of Nebraska, and  southeast Kansas are 1 to 7 cents weaker than the three year average.  On average across all locations, basis levels are 9 cents weaker than the three-year historical average.

Soybean Basis	Soybean Basis Deviation
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Corn

Corn Futures:  The CBT Dec 04 corn futures contract closed at $2.06 on 11-17-04, the same as last month (10-20-04).  The Wednesday close was down from the same time last year by 26 cents.

Corn Basis:  Cash prices averaged $1.86 across the 408 Great Plains locations and ranged from a high of $2.58 to a low of $1.48/bu.  Basis levels averaged -$0.212 and were the weakest in Nebraska, 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 weaker than the three-year historical average by 15 to 18 cents, as were eastern Nebraska and northeastern Kansas. Colorado was 8 to 10 cents weaker than previous levels.  Southwestern Kansas and most of Oklahoma and Texas the panhandle were about 6 to 8 cents weaker than historical average basis levels. On average across all locations, basis levels were about 15 cents weaker than the three-year historical average.

Corn Basis	Corn Basis Deviation
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Wheat

Wheat Futures:  The KCBT Dec 04 wheat futures contract closed at $3.58 on 11-17-04, up from last month (10-20-04) by 13 cents.  The Wednesday close was down $0.06 from the same week last year.

Wheat Basis:  Cash prices averaged $3.36 across 330 locations in the Great Plains region.  The high cash price observed was $3.99 and the low price was $2.88/bu.  Basis levels averaged -$0.045 across all locations.  Stronger basis levels were seen in eastern Kansas, Oklahoma and portions of Colorado, while the Oklahoma/Texas panhandles, western Nebraska and Kansas basis levels were weaker than other locations.

Wheat Basis Deviation:  Southern Kansas basis levels  were slightly stronger than historical averages, while much of Nebraska and northern Kansas showed basis levels that ranged from 15 to 22 cents weaker than the three year historic average.  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 Dec 04 corn futures contract closed at $2.06 on 11-17-04, the same as last month (10-20-04).  The Wednesday close was down from the same time last year by 26 cents.

Grain Sorghum Basis:  Cash prices averaged $1.66 across 282 locations and ranged from a high of $2.17 to a low of $1.16/bu.  Basis averaged -$0.398 across all locations.  Basis levels were weaker in western Missouri, most of Kansas and Nebraska.

Grain Sorghum Basis Deviation:  Basis levels in the Oklahoma/Texas panhandle, eastern Colorado and western Kansas were relatively stronger but still 15 to 20 cents weaker than the historical three-year average.  The basis levels observed this week averaged 29 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