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Corn and Soybean Basis Behavior and Forecasting: Fundamental and Alternative Approaches

Author

Listed:
  • Jiang, Bingrong
  • Hayenga, Marvin

Abstract

This basis study covers corn and soybean markets across the U.S. Corn and soybean bases have seasonal patterns, as does the relative importance of factors (storage costs, barge rates, production levels) determining the basis. Corn and soybean basis behavior in port locations is different than in major production areas. Though three-year-average basis forecasts are reasonably accurate in recent years, forecasts based on a three-year-average supplemented with additional fundamental variables or seasonal ARIMA model forecasts slightly improved basis forecasting accuracy in our sample tests.

Suggested Citation

  • Jiang, Bingrong & Hayenga, Marvin, 1997. "Corn and Soybean Basis Behavior and Forecasting: Fundamental and Alternative Approaches," 1981-1999 Conference Archive 285704, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nc8191:285704
    DOI: 10.22004/ag.econ.285704
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    File URL: https://ageconsearch.umn.edu/record/285704/files/confp9-97.pdf
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    Cited by:

    1. Song, Wenxing & Fortenbery, T. Randall, 2017. "Forecasting Hard Red Winter and Soft White Wheat Basis in Washington State," 2017 Conference, April 24-25, 2017, St. Louis, Missouri 285875, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    2. Flores, Ivan & Janzen, Joseph, 2023. "Physical and Economic Distance in US Soybean Markets," 2023 Conference, April 24-25, 2023, St. Louis, Missouri 379024, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    3. Mattos, Fabio & Silveira, Rodrigo L. F., 2015. "The Effects of Brazilian Second (Winter) Corn Crop on Price Seasonality, Basis Behavior and Integration to International Market," 2015 Conference, April 20-21, 2015, St. Louis, Missouri 285840, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    4. Kim, Sanghyo & Zulauf, Carl & Roberts, Matthew, 2015. "Forecasting Returns to Storage: The Role of Factors other than the Basis Strategy," 2015 Conference, April 20-21, 2015, St. Louis, Missouri 285828, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    5. Payne, Nicholas & Karali, Berna, 2015. "Can Cattle Basis Forecasts Be Improved? A Bayesian Model Averaging Approach," 2015 Conference, April 20-21, 2015, St. Louis, Missouri 285826, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    6. Kastens, Terry L. & Dhuyvetter, Kevin C., 1998. "Post-harvest Grain Marketing with Efficient Futures," 1981-1999 Conference Archive 285731, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Bullock, Shaina S. & Bullock, David W. & Wilson, William W., 2023. "Short-Term Factors Influencing Corn Export Basis Values in the Pre- and Post-COVID Periods: A Comparison of Econometric and Machine Learning Approaches," 2023 Conference, April 24-25, 2023, St. Louis, Missouri 379019, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    8. Dhuyvetter, Kevin C. & Kastens, Terry L., 1998. "Forecasting Crop Basis: Practical Alternatives," 1981-1999 Conference Archive 285711, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    9. Kim, Sanghyo & Zulauf, Carl, 2014. "Return and Risk Performance of Basis Strategy: A Case Study of Illinois Corn and Soybeans, 1975-2012 Crop Years," 2014 Conference, April 21-22, 2014, St. Louis, Missouri 285816, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    10. Kastens, Terry L. & Dhuyvetter, Kevin, 1999. "Post-Harvest Grain Storing and Hedging with Efficient Futures," 1981-1999 Conference Archive 285761, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

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