Grain Elevator Outlook: Tight Basis Squeezes Grain and Oilseed MarginsDecember 2019 - Tanner Ehmke
- Grain elevators are expected to have slimmer margins YoY from buying sharply higher basis on corn, soybeans, and wheat.
- Revenues will also be stressed for elevators as they incentivize farmers to sell by offering discounts on storage, free delayed pricing, or free grain drying.
- Grain quality issues from high moisture problems at harvest and frost damage on immature fall crops will raise management costs for elevators and potentially result in greater losses to shrinkage and spoilage.
- Futures carries on corn and soybeans have been trending higher in recent months; however, carries are markedly smaller than last year, especially for wheat.
- While grain elevator margins generally are expected to be down in the year ahead, grain handlers can profit from blending new-crop supplies with existing old-crop inventories, and those with reliable access to propane can profit from drying grain.
Agriculture & Agribusiness
Subscribe to Reports
If you’re a customer of CoBank and would like to receive the latest Knowledge Exchange reports, please take a moment to provide us with your contact information and area of interest.