USDA’s lowering of yields and carryout is reflected in basis levels. Progressive Ag Marketing market analyst Tom Lilja says the market was giving signs of tight supplies. “I think there’s a big reason these basis levels have been so red hot since August. That should have been our first clue. I don’t know if anyone quite expected this, but you throw in some La Nina-type weather patterns in South America and the market gets pretty nervous.” Lilja says South America will need to have a good crop or things will get very tight. “Argentina did admit to a 2.5 million metric ton cut in soybeans. The black sea region has been dry and there’s been a substantial cut in Ukrainian corn production. The pattern is giving us fits.”
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