Freight Pressure vs Basis Gains: Why Jan–Feb Grain Movement Is Getting Complicated
Market Dynamics: Soybeans Recover, Corn Stalls
With the return of Chinese soybean business, we’ve seen an improvement in the soybean basis; however, the corn basis has remained weaker on the farmer's side. The lack of significant soybean movement at harvest was a contributing factor in the large PNW corn harvest program we saw this year, which continues through the March timeframe.
Freight Pressures Mount
With Chinese purchases ramping up and shipments starting to move, we are entering a harvest-like shipping period in January and February. This has limited both corn and soybean basis potential, as secondary freight values have skyrocketed. Freight costs are now trading at near-harvest levels, driven by intense export demand. These increased freight values are offsetting recent basis increases from the PNW, as it’s becoming more expensive to ship commodities in large volumes.
Rail & Freight Bottlenecks Pressuring Basis
This trend is likely to continue through the winter months. Sales are already on the books for corn, and the January–February window has historically been strong for PNW shipping. As China looks to get product on a boat before the Lunar New Year, we expect continued freight congestion and limited basis improvement.
What It Means for Your Marketing Strategy
New export sales could push the basis higher—but only if freight loosens. So far, strong demand is continuing to inflate secondary freight values, which is capping local basis opportunities.
We may see an elevator get caught in a pinch and offer a temporary basis spike to fill a shuttle or cover prior commitments. These short-lived windows will disappear quickly, so readiness is key.
Scenario Planning: What’s Next?
If Chinese demand holds and weather stays manageable, movement could pick up, but basis will still battle freight costs. However, if we see any pullback in export activity, it could create an oversupply in rail availability—temporarily lifting basis.
Best-Case: Strong demand, improved rail movement, short-term basis bump.
Worst-Case: Continued freight pressure, stagnant corn basis, limited flexibility for marketers.
Final Thoughts
Looking forward, it seems unlikely we’ll see any major basis improvement near-term. But if you're looking to move grain between now and March, be ready to strike when small windows open.
Pro Tip: “Target basis pushes around logistics crunches. If your elevator needs to fill a train, your window is small— but your opportunity could be solid.”
Alex Andel
Basis and Freight | Market Advisor, Northern Plains
As our basis and freight expert, Alex assesses current market conditions and forecasts future scenarios. His keen insights create transparency in the cash market, resulting in significant returns for our clients.
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