Date of this Version
University of Nebraska-Lincoln Extension Circular EC846 (Revised September 2014)
Local cash grain prices can be broken down into two components, futures and basis.1 The futures portion is determined by buyers and sellers of futures contracts, which often represents factors influencing global supply and demand. The basis portion represents factors influencing the local elevator. For any grain marketing decision, sale or purchase, there is a corresponding basis. Understanding the forces driving basis and how to maximize returns from basis is central to making informed grain marketing decisions. The purpose of this publication is to provide an understanding of how basis works for a primary commodity grown in Nebraska, aimed at improving the marketing decisions of buyers and sellers of grain.
Tables and charts in this publication were produced using price data reported by United States Department of Agriculture Agricultural Marketing Service (USDA AMS) Cash Grain Bids publications for Nebraska (WH_GR110, WH_GR111, and TO_GR110). Prices are reported weekly using Thursday cash prices between 2009 and 2013. Reported locations have a population of 1,000 residents or more, or are the only location reported by USDA AMS within a 50 mile radius. Basis was calculated using the local cash price and the corresponding closing price for the nearby futures contract. These observations are numbered by week during the calendar year, where week 1 indicates the first week in January and week 51 indicates the last week in December.