Corn, Soybean Premiums Widen After U.S. Farmers Limit Sales

Cash premiums for corn and soybeans shipped this month to terminals near New Orleanswidened relative to Chicago futures as U.S. farmers limited sales following a price slump this week.

The spot-basis bid, or premium, for corn delivered in March at Gulf of Mexico ports was 52 cents to 57 cents a bushel above May futures, compared with 52 cents yesterday, U.S. Department of Agriculture data show. The soybean basis was 66 cents to 86 cents a bushel above May futures, compared with 66 cents to 75 cents, the USDA said.

“It’s probably been the slowest week of farmer sales in more than a month,” said Bryce Stremming, a commodity risk consultant for Mid-Co Commodities Inc. in Bloomington, Illinois. “Export demand is strong enough that people need some supplies.”

Corn futures for May delivery fell 18.25 cents, or 2.6 percent, to $6.8275 a bushel on the Chicago Board of Trade. The price has dropped 6.2 percent this week.

Soybean futures for May delivery rose 6.5 cents, or 0.5 percent, to $13.555 a bushel. The oilseed dropped 4.6 percent in the previous three days.

Barge shipping costs have increased as much as 19 cents a bushel in the past week, Stremming said. Today, the cost of moving grain along the upper Illinois River to New Orleans rose to 650 percent of the 1976 published tariff rate, up from 498 percent a week earlier, he said.

In the week ended March 5, shipments dropped 29 percent to 411,520 short tons from a week earlier and were down 45 percent from a year earlier, the USDA said today in a report.

“Rising barge freight is raising the bids for grain,” Stremming said. “There’s increased demand for barges, and high water is slowing deliveries.”

(Source: http://www.bloomberg.com/news/2011-03-10/corn-soybean-premiums-widen-after-u-s-farmers-limit-sales.html)