What is a good corn basis?
A good corn basis depends on local elevator demand, freight, storage, ethanol demand, river access, and the nearby futures contract. Learn how to judge whether a basis bid is strong.
A good corn basis is one that is stronger than your local normal for the season, crop year, and delivery window. Corn basis is the local cash bid minus nearby CBOT corn futures, so a -20 cent basis can be strong in one county and weak in another. Compare the bid against recent local elevator history, harvest pressure, storage availability, ethanol or feed demand, freight, and whether the buyer needs nearby bushels.
How to use this answer
- Start with the formula: local cash price minus nearby corn futures equals basis.
- Compare the number to the same delivery window, not a different crop-year or deferred contract.
- Basis often weakens at harvest and strengthens when elevators, ethanol plants, feeders, or exporters need nearby bushels.
- A strong basis is not automatically a strong flat price; futures can still be weak.
- Use basis to decide whether to set the local cash component, then separately evaluate futures risk.
Common follow-up questions
Is a negative corn basis bad?
Not always. Many interior markets normally trade at a negative basis. The key is whether the current basis is better or worse than local seasonal norms.
What makes corn basis stronger?
Local demand, short nearby supply, ethanol grind, feed demand, export pull, rail or river access, and tight freight or storage can strengthen basis.
Should I sell corn just because basis is strong?
Not by itself. A strong basis can justify setting the basis component, but futures price, cash-flow needs, storage cost, and marketing plan still matter.