November 8, 2024

Indiana Corn and Soybean Basis Rally Heading into November

by Josh Strine

In the month leading up to the most recent crop basis update, distinct trends in the Northern and Southern parts of Indiana were observable. Over the past three weeks, there has been a consistent basis strengthening across Indiana for both corn and soybeans. In every part of the state, corn and soybean basis were greater on November 6th than on October 10th. In most cases, this has meant that basis levels have exceeded the three-year average for the first time this year.

Looking closer at the corn nearby basis, Figure 1 and Figure 2 show the basis in Northeast and Northwest Indiana, respectively. These represent the two extremes in corn basis movement over the past 3 weeks. In Northeast Indiana, corn basis has strengthened by $0.42/bu. since October 10th and is now greater than the historical average. On the other hand, corn basis in Northwest Indiana has only increased by $0.02/bu. in the past three weeks. While the 2024 basis in the region has not exceeded the historical average, it is closer to the three-year average than last month.

Figure 1. Corn Basis, Nearby for Northeast Indiana

Figure 1. Corn Basis, Nearby for Northeast Indiana

Figure 2. Corn Basis, Nearby for Northwest Indiana

Figure 2. Corn Basis, Nearby for Northwest Indiana

Nearby soybean basis levels for Southeast and Northwest Indiana are shown in Figure 3 and Figure 4, respectively. The soybean basis strengthened the most in Southeast Indiana over the past month ($0.41/bu.). It strengthened the least in Northwest Indiana ($0.07/bu.). Northwest Indiana is now the only region of the state where soybean basis is still weaker than the historic average.

Figure 3. Soybean Basis, Nearby for Southeast Indiana

Figure 3. Soybean Basis, Nearby for Southeast Indiana

Figure 4. Soybean Basis, Nearby for Southwest Indiana

Figure 4. Soybean Basis, Nearby for Southwest Indiana

In every region of Indiana, soybean and corn basis have strengthened relative to October as well as the three-year average. After seeing a statewide basis strengthening over the past month, it’s important to recognize how increases in basis levels can be taken advantage of. One example is a strengthening in basis within a marketing year increases the payoff of a storage hedge. Consider a farmer who harvests and stores soybeans in October and takes a short position on January soybean futures. Over the next month, future prices and local cash prices may move. In November, they decided to sell their soybeans and close their futures position by buying January futures to offset the prior sale. If local prices fell by less than the futures price (basis increase), the losses from the change in cash prices were less than the gains in the futures market, and the hedge generated additional revenue. This movement pattern is what we saw from October 9th to November 6th of this year across Indiana.

The three-year average may be used as a forecast of future basis levels. When the current basis is above the three-year average, history would suggest future strengthening may be smaller, and weakening may be greater relative to previous years. The opposite is true when the basis is below the historical average. While the historical average may give a general direction of future basis movements, 2023 is a perfect example of how basis levels can vary significantly from the three-year average. Visit the Purdue Center for Commercial Agriculture Crop Basis Tool to see how last year’s basis varied from the historical average and where your local basis levels may be headed through this marketing year.

TAGS:

TEAM LINKS:

RELATED RESOURCES

Cost Efficiency Comparisons of U.S. and Canadian Farms

May 27, 2025

The objective of this paper is to measure the cost efficiency of corn and soybean production for six typical farms in North America (three in Canada and three in the United States). All these farms produce both corn and soybeans. Cost efficiency is measured using data envelope analysis. In addition to comparing efficiency indices, cost shares of the most efficient farm is compared to cost shares for the other five farms.

READ MORE

Corn and Soybean Basis Go Positive as Strengthening Continues

May 16, 2025

The corn and soybean basis across the Eastern Corn Belt have strengthened for three straight months. As a result of the increasing trend, multiple cash bids across the region are now higher than the July futures price (i.e., basis to July futures is positive). The consistent strengthening has also led to many local basis levels reaching their highest mark of the 2024 – 2025 marketing year.

READ MORE

Indiana Farm Income Outlook Report, Spring 2025

May 14, 2025

The Spring 2025 Indiana Farm Income Outlook, published by the Rural and Farm Finance Policy Analysis Center (RaFF),  provides updated projections for Indiana farm profitability through 2026. The report highlights a projected 40% increase in Indiana net farm income in 2025—driven largely by higher government payments—and offers insight into trends in crop and livestock markets, production expenses, and policy impacts.

READ MORE

UPCOMING EVENTS

We are taking a short break, but please plan to join us at one of our future programs that is a little farther in the future.

2025 Indiana Farm Custom Rates

April 17, 2025

The rates reported in this publication were compiled from questionnaires received from farmers, farm owners, farm custom operators, and professional farm managers in Indiana during the last month of 2024 and the first three months of 2025. Respondents were asked to report custom rates they had either paid or received during the past year.

READ MORE

(Part 1) 2024 Indiana Farmland Values & Market Trends

September 11, 2024

Interested in the latest trends and insights on U.S. & Indiana farmland values? This AgCast episode shares insights from the Farm Sector Balance Sheet, USDA data collection methods, regional variations in land values, and the influences of factors such as interest rates and development pressures on farmland prices. Gain an in-depth understanding of trends, market dynamics, and future expectations for farmland values.

READ MORE

August 2024 PAER issue: Farmland Prices Increase Despite Downward Pressure

August 9, 2024

Indiana farmland prices have continued the trend of record highs in 2024, according to the latest Purdue Farmland Value and Cash Rent Survey. The average price of top-quality farmland reached $14,392 per acre, a 4.8% increase from June 2023. Average and poor-quality farmland also saw gains, with prices increasing 3.7% and 4.4% to $11,630 and $9,071 per acre, respectively.

READ MORE