Commodity Markets
from October 2024 when newly harvested bushels were moving into the market.
Basis: The First Golden Rule
When the subject turns to basis, I’ m reminded of presentations my friend and fellow analyst Tregg Cronin used to give on Grains’ Golden Rule: First basis, then spreads, then futures.
In the world of grain merchandising( which Tregg was a part of), moves in grain markets started with basis. This was a lesson I also learned as a merchandiser decades prior, setting aside my penchant for focusing on futures( more on this another time).
In late August, a look ahead at new-crop basis showed both corn and soybean markets running below previous 5-year low weekly close trendlines. This told us the commercial side of both markets were comfortable with whatever supplies were created at harvest in relation to initial new-crop demand.
Seasonally, both basis markets tend to post low weekly closes in the October-November timeframe, as we would expect with fall harvest wrapping up at that point.
The Big Picture in Market Carry
As for futures spreads, you’ ll recall I use a number of different spreads over the course of the year to show me real supply and demand.
From the start of September through the end of February I track the November soybean / December corn futures spread, with the 2025 edition telling me in advance the corn market bought acres away from soybeans. Given this, none of the
USDA’ s acreage guesses over the spring and summer have surprised me.
Once we turned the calendar page to March, my focus turned to new-crop spreads as a whole, tracking the percent of calculated full commercial carry covered by each spread over time( see my Farmers Hot Line Harvest piece).
Both corn and soybean spreads trended toward covering more commercial carry through mid-August before stabilizing, telling us merchandisers had likely built in the most bearish pre-harvest supply and demand case.
As September 2025 gets under way, I’ ll continue to monitor the 2025-2026 marketing year spreads while starting the next season with the 2026 November soybean / December corn spread.
Oh my!
About the Author
Darin Newsom has been working with markets in general for nearly 40 years, dating back to Black Monday 1987. Over that time, he has worked in local grain elevators, first dumping trucks then as a merchandiser, before becoming a commodity broker and advisor. That eventually led him to DTN where he spent 15 years as the company’ s senior market analyst before going out on his own with Darin Newsom Analysis, Inc.
These days, he also has the title of Senior Analyst for Barchart. Along the way, he has developed his own way of analyzing markets in every sector, always proudly reminding people that he is not an economist.
28 | 515-574-2206 | 515-574-2189 | September 2025