Corn, Soybean Premiums Rise as Price Drop Slows Farmer Sales
Cash premiums for corn and soybeans shipped in July to terminals near New Orleans rose relative to Chicago futures as U.S. farmers withheld supplies after prices slumped on a report that June 1 inventories were larger than expected.
The spot-basis bid, or premium, for corn delivered next month was 66 cents to 71 cents a bushel above July futures, up from 64 cents to 68 cents yesterday, U.S. Department of Agriculture data show. The soybean basis rose to 74 cents to 78 cents a bushel from 74 cents to 77 cents.
“The cash market is working just enough to source a few bushels because farmers are done selling,” said Bryce Stremming, a risk consultant for Mid-Co Commodities Inc. in Bloomington, Illinois. “The cash market will determine the value of corn and soybeans, and right now it’s saying supplies are still a little tight.”
Corn futures for July delivery plunged 69 cents, or 9.9 percent, to $6.29 a bushel on the Chicago Board of Trade. Earlier, the price fell to $6.15, the lowest for the contract since January 10.
Soybean futures for July delivery dropped 28 cents, or 2.1 percent, to $13.0625 a bushel after earlier touching $12.90, the lowest for the contract since March 16.
Corn stockpiles as of June 1 were 3.67 billion bushels, 12 percent higher than the average estimate in a Bloomberg News survey, the USDA said today. Soybean reserves were estimated at 619 million bushels, 4.6 percent more than forecast and above year-earlier supplies.
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