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

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.