This week’s Crop Progress report from USDA indicates all that remains to be harvested are acres here and there. Soybeans have reached 97 percent in the 18 states – two points ahead of average. North Carolina is the laggard at only 62 percent - but its average for this time is 44 percent. Nebraska is finished, South Dakota is at 99 percent and Iowa at 97 percent.
Likewise, Corn harvest is 93 percent complete, one point ahead of average. Nebraska reports harvest complete; Iowa, at 94 percent is on average; South Dakota is one point behind average, at 92 percent.
Basis is quite weak, as the charts below indicate, supporting the reports we are hearing that buyers are full-up and grain piles are not uncommon this fall. The corn futures market is offering 8 cents carry to March and about 16 cents out to May. Soybean carry is 15 cents to January, 23 cents to March, and 30 cents to May.
Excluding drying since that decision already has been made, Iowa state University’s storage cost calculator (http://www.extension.iastate.edu/agdm/decisionaidscd.html#outlook) estimates the cost of storing corn until March at 22 cents and soybeans at 38 cents. These are greater than the price improvement the futures market is projecting at this time.
It’s the hope of basis improvement that has many farmers storing both corn and beans this year. Given the seasonal tendency to improve after harvest and the fact that USDA’s monthly supply/demand reports have been raising usage regularly, hopefully demand will run through the piles and allow basis to improve quickly.