Corn And Soybean Basis Dynamics In The Mid South

Arkansas, Louisiana, Mississippi, and Tennessee all border the Mississippi River, a primary shipping channel in the United States. These Mid-South states serve as a southern agricultural hub in terms of corn and soybean production. The Mid-South is a prime location for merchandisers to take advantage of the Mississippi River in addition to a vast connection of railway systems and interstates for moving grain. The main objective of this study is to analyze local basis for selling locations in the Mid-South and connect basis movements with transportation flows to understand grain basis dynamics in the Mid-South better. An empirical analysis shows the nearby futures months have the greatest effect on both corn and soybean basis dynamics in the Mid-South. Farmers and merchandisers can take the results to better understand how changes in basis patterns can impact producer revenue and how to benefit from those changes.