Soybean, Corn Premiums Fall as River Restrictions Slow Demand

Cash premiums for soybeans and corn shipped in May to terminals near New Orleans fell relative to Chicago futures after the U.S. Coast Guard restricted barge traffic on the Mississippi River because of flooding.

The spot-basis bid, or premium, for soybeans delivered this month was 58 cents to 64 cents a bushel above July futures, down from 60 cents to 67 cents yesterday, U.S. Department of Agriculture data show. The corn basis was 56 cents to 57 cents a bushel compared with 56 cents to 58 cents.

“Barge shipments will be very slow the next several weeks, until the water gets flushed out into the Gulf of Mexico,” said Dave Marshall, a farm-marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois. “Basis deteriorated on uncertainty about grain shipments and slowing export demand.”

Soybean futures for July delivery rose 4.25 cents, or 0.3 percent, to $13.26 a bushel on the Chicago Board of Trade, the first gain in five sessions. The price fell 4.9 percent this week.

Corn futures for July delivery fell 22.5 cents, or 3.2 percent, to $6.8625 a bushel in Chicago, capping a 9.3 percent drop this week.

The Coast Guard closed a five-mile portion of the Mississippi near Caruthersville, Missouri, for eight days because of the imminent danger of vessel wakes topping a flood wall. Water levels rose to a record 47.57 feet (13.9 meters) today, above the previous peak of 46 feet in 1937. The river is forecast to crest in New Orleans about May 23.

“It’s going to be several weeks before barge shipping returns to normal,” Marshall said.

(Source: http://www.bloomberg.com/news/2011-05-06/soybean-corn-premiums-fall-as-river-restrictions-slow-demand.html)