By Andi Anderson
In Indiana, corn and soybean basis levels have shown significant strengthening in the weeks leading up to November.
Across the state, both corn and soybean basis have increased, exceeding levels from October and the three-year historical average, marking the first time this year that basis has surpassed the average.
The northern part of Indiana shows distinct trends in basis movements. In Northeast Indiana, corn basis has strengthened considerably, rising by $0.42 per bushel since October 10, now surpassing historical levels.
In contrast, Northwest Indiana saw a more modest increase, with a $0.02 per bushel rise. Though not exceeding the historical average, it is closer to the three-year benchmark compared to the previous month.
The strengthening trend in basis provides opportunities for farmers, especially those storing crops and taking short futures positions. By selling in November and closing their futures positions, farmers may benefit from any increase in basis, which can generate additional revenue if local prices fall at a slower rate than futures prices.
This recent basis movement reflects a beneficial shift for Indiana farmers, especially for those who manage storage hedges. Higher basis levels enhance the value of stored crops, providing additional income potential during the marketing season.
The Purdue Center for Commercial Agriculture offers a Crop Basis Tool to help track these changes, providing forecasts based on historical averages.
The three-year average remains a useful forecast tool for future basis movements. However, this season’s significant strengthening above the average demonstrates that basis levels can vary considerably year-to-year, offering valuable insights for Indiana’s agricultural market this season.
Photo Credit: gettyimages-studio2013
Categories: Indiana, Crops, Corn, Soybeans