Soybeans, Corn Premiums Rise on Improving Overseas Demand

Cash premiums for soybeans and corn shipped this month to terminals near New Orleans widened relative to Chicago futures on rising demand for U.S. supplies.

The spot-basis bid, or premium, for soybeans delivered in March at Gulf of Mexico ports rose to 64 cents to 66 cents a bushel above May futures from 63 cents to 64 cents yesterday, U.S. Department of Agriculture data show. The corn basis was 51 cents to 52 cents a bushel above May futures, up from 49 cents to 52 cents. The average bid rose to $7.8825, the highest since June 27, 2008.

“We had another week of good export sales” for corn and soybeans, said Glenn Hollander, a partner at Hollander & Feuerhaken, a cash grain merchandiser and broker in Chicago. “The basis will start to improve, perhaps significantly, if there is a further increase in export sales.”

Soybean futures for May delivery advanced 17.75 cents, or 1.3 percent, to close at $14.12 a bushel on the Chicago Board of Trade, the third consecutive gain. On Feb. 9, the commodity reached a 30-month high of $14.5575.

Corn futures for May delivery rose 15.25 cents, or 2.1 percent, to close at $7.3675 a bushel in Chicago, the fourth gain in five sessions. The price has surged 91 percent in the past 12 months, touching a 31-month high at $7.4425 on Feb. 22.

From Sept. 1 to Feb. 24, cumulative corn sales rose 6.2 percent to 33.97 million metric tons from a year earlier, according to government data. Soybean sales advanced 10 percent to 39.4 million tons.

Grain Barges

An average of 59 percent of corn and 52 percent of soybean exports were moved by barge during the five years ending in 2007, according to a USDA report in April.

During the week ending Feb. 26, 654 grain barges were unloaded in New Orleans, down 10 percent from the previous week, the USDA said in a report today. There are 71 vessels expected to be loaded at terminals near New Orleans during the next 10 days, up 20 percent from last year, the government said.

“The grain elevators that own the supplies are not going to sell based on rising futures, they want to sell when the basis improves,” Hollander said. “Supplies are going to get tight if export demand improves.”

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net

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