Corn, Soybean Premiums Fall as Mississippi Barge Traffic Resumes

Cash premiums for corn and soybeans shipped this month to terminals near New Orleans declined relative to Chicago futures after the middle Mississippi River reopened to barge traffic for the first time in three months.

The spot-basis bid, or premium, for corn delivered in March at Gulf of Mexico ports was 51 cents to 52 cents a bushel above May futures, compared with 52 cents to 53 cents on March 11, U.S. Department of Agriculture data show. The soybean basis was 60 cents to 76 cents a bushel above May futures, compared with 66 cents to 85 cents.

“Grain elevators are selling more supplies,” said Glenn Hollander, a partner for Chicago-based Hollander & Feuerhaken, a cash grain merchandiser and broker. “Right now, supplies are adequate to meet export demand.”

Corn futures for May delivery rose 1.75 cents, or 0.3 percent, to close at $6.66 a bushel on the Chicago Board of Trade, halting a six-day decline. Soybean futures for May delivery gained 5.5 cents, or 0.4 percent, to $13.40.

Shipping traffic on the middle Mississippi River reopened on March 11 when the first barge moving upstream reached Dubuque, Iowa, the National Grain and Feed Association said on its website. A portion of the river from about Missouri to Iowa had been closed on Dec. 6 for repairs and to avoid damage to vessels from ice during the winter.

“The areas that have corn to sell will soon be shipping on the Mississippi River,” Hollander said.

Supplies of soybeans are also moving to shipping terminals after processors slowed crushing last month, Hollander said. Consumption fell 16 percent to 124.884 million bushels in February, compared with 148.351 million a year earlier, the National Oilseed Processors Association said today. Traders surveyed by Bloomberg News expected 130.62 million on average.

Japan Outlook

Futures and cash premiums may rise as Japan, the largest buyer of U.S. corn and third-largest importer of U.S. soybeans, will increase purchases once ports and milling operations reopen following last week’s deadly earthquake, Hollander said.

Prime Minister Naoto Kan mobilized 100,000 troops and pledged an emergency-spending package to cope with the quake, the ensuing tsunami and two hydrogen explosions at a nuclear power station.

“Usually, disasters lead to increased demand,” Hollander said. “The Japanese government is pumping money into the economy, and I think the markets are bottoming out.”

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

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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