Corn basis in many Western Kansas locations has been abnormally strong all throughout 2012, but has been especially strong since the third week in June. The following example for KSU AgManager grain basis tool (here) shows how corn basis in Scott City has been over $0.20 per bushel over futures since the third week in June. Now in the third week of July corn basis levels are equal to what has a very strong basis bid from last year at this time (i.e., from $0.20 to $0.42 or so over lead contract futures) – see the corn basis chart below.
Similarly, grain sorghum basis in Scott City has been stronger than $0.25 per bushel under lead contract CBOT corn futures since the third week in June. Now in the third week of July grain sorghum basis levels are still over $0.15 under – see the grain sorghum basis chart below.
These basis trends for corn and grain sorghum in this central western Kansas location are indicative of the desire of livestock feeders and ethanol plants to obtain feedgrains to prolong their economic sustainability in what is shaping up to be a very high price time period for feedgrains for the remainder of 2012 and on into 2013.