Basis levels sink as COVID-19 spreads
Basis levels are crashing as the coronavirus pandemic worsens.
Angie Setzer with Citizen’s Grain in central Michigan says bids at a local ethanol plant are indicative of what’s transpiring across the Midwest.
“Obviously with the significant drop in crude, I mean we’ve basically seen two to three black swans hitting the ethanol industry. So talking to the ethanol producer, they backed their bid off from a week ago another 20 cents.”
She tells Brownfield farmers anxious to move corn out of storage are frustrated.
“This logistical situation that I’ve seen at least here locally is nothing like I have seen before. Offered 10,000 bushels to an ethanol plant for April shipment the other day, he never even asked me the price. He just told me he wasn’t interested.”
Setzer says some ethanol plants are slowing their grind, but others can’t afford to because there’s no margin protection.