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Advisor

Basis

Watching markets lately and basis levels widening in my area, my concern arises out of a conversation with a railroad representative at a conference. Many trains are sitting idle as commodities are off from their previous year's levels. Coal is down corn and wheat is down. Beans are flat. Total volume of shipments are down significantly.

Yet basis levels in some parts of the country are higher than they have been for a while. One farmer suggested the new loader facilities were the reason for widening basis levels. What do you think?
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6 Replies
Honored Advisor

Re: Basis

Sw ks basis is holding into new crop..... local elevator bidding +30 for old crop and new..... ethanol at +45 dec15 for new crop delivered in Oct  

No indication here than anyone is expecting a big run at harvest.....  Actually the main thing the both want to talk about is how "how late will harvest be?"

 

 

 

 

You took a long break Smokeyjay,   lost without ya......  Hope everything is ok......

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Veteran Advisor

Re: Basis

Maybe I'm missing something but I don't follow thereasoning of the loader facilities hurting basis? Local Milo basis has tanked but corn is holding steady. Wheat is normal for this time of year
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Honored Advisor

Re: Basis

The only thing i see in it ----- imo,, it has created another middle man and taken away the smaller elevators ability to use its rail line.

 

It would hurt if you have to truck to the competitors rail loader because your siding isn't big enough for the train to make a stop...

 

In that example the small elevator lowers basis to get the grain moved...

 

 

maybe that doesn't make sense,,,,,, but the railroad has done its share to hurt smaller merchandisers...

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Advisor

Re: Basis

Yes I did. Slowly coming back after a heavy travel schedule. Thanks for the welcome, SW!
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Veteran Advisor

Re: Basis

Welcome back, Smokeyjay. We always miss all of the veteran voices.

 

Mike

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Advisor

Re: Basis

200 hopper cars have been sitting on a siding close to me for over a month

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