Corn Premiums Rise on Increased Demand; Soybean Basis Drops

Cash premiums for corn shipped in April to terminals near New Orleans rose relative to Chicago futures as demand improved. The soybeans basis fell as buying is shifting to newly harvested supplies in South America.

The spot-basis bid, or premium, for corn delivered in the second half of this month was 51 cents to 59 cents a bushel above May futures, compared with 51 cents to 56 cents yesterday, U.S. Department of Agriculture data show. The basis for soybeans delivered in April fell to 58 cents to 64 cents a bushel from 58 cents to 67 cents.

“Corn export sales improved a little, and shipments will begin to ramp up the next several weeks,” said Brian Basting, a market analyst for Advance Trading Inc. in Bloomington, Illinois. “Soybean demand is slipping because of the increased competition from Brazil and Argentina.”

Corn futures for May delivery fell 1.25 cents, or 0.2 percent, to $7.5425 a bushel on the Chicago Board of Trade today. Soybean futures for May delivery declined 2.5 cents, or 0.2 percent, to $13.31 a bushel on the CBOT.

In the week ended April 7, exports of corn for shipment before Aug. 31 rose 37 percent from a week earlier to 847,959 metric tons, even as prices rose to the highest since July 2008, the U.S. Department of Agriculture said today in a report. Soybean sales for delivery by Aug. 31 were down 18 percent from a year earlier, USDA data show.

(Source: http://www.bloomberg.com/news/2011-04-14/corn-premiums-rise-on-increased-demand-soybean-basis-drops.html)