Soybean, Corn Premiums Drop as Rains Boost U.S. Yield Potential

Cash premiums for soybeans and corn shipped to export terminals near New Orleans fell relative to Chicago futures after Midwest rains increased the yield potential of crops in the U.S., the biggest world’s producer, reported “Kazakh-Zerno” NA with reference to the “Bloomberg“.

The spot-basis bid, or premium, for soybeans delivered in July shrank to 85 cents to 90 cents a bushel above August futures from 88 cents to 94 cents yesterday, U.S. Department of Agriculture data show. The corn premium fell to 33 cents to 35 cents above September futures from 35 cents. The spot premium dropped to the lowest level since March 19.

“We have big crops on the way this year and that will encourage people to wait” for supplies from the harvest that starts next month in the South, said Bryce Stremming, a commodity risk consultant for Mid-Co Commodities Inc. in Bloomington, Illinois. “There was a lot of farmer selling last week,” increasing supplies available for exporters, he said.

Soybean futures for August delivery rose 0.75 cent to $10.16 a bushel on the Chicago Board of Trade. The price on July 16 touched $10.27, the highest level for the contract since Jan. 8. Futures have risen 9.1 percent this month.

Corn futures for September delivery fell 3.25 cents, or 0.9 percent, to $3.765 a bushel in Chicago, the third decline this week. On July 15, the contract touched a four-month high of $3.9775.

The September corn futures closed at a discount of 13.75 cents to the December contract, the highest level since they began trading in 2008, exchange data show. The widening discount should encourage increased demand for remaining supplies from last year’s crop, Stremming said.

August soybeans closed at a premium of 25.5 cents to September futures today, up from 18 cents a week earlier

“Now that the basis has broken, there may be increased demand for corn,” Stremming said. “The soybean harvest is on the way, and that may slow buying.”

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