Basis is the local cash price minus the nearby futures price, and it is the number that turns a board quote into what a delivery ticket actually pays. In west central Indiana, corn basis to July futures fell to a 15-year low in September 2024 before strengthening into December, according to Purdue University's Center for Commercial Agriculture.
What does basis actually measure?
Basis is defined as the difference between a local cash price and the relevant futures contract price for a specific delivery period, expressed as cash price minus futures price, per University of Missouri Extension's guide to basis. A negative basis means the local cash bid sits below the futures price; a positive basis means it sits above.
University of Missouri Extension illustrates the math with a hypothetical: a local elevator bidding $4.20 per bushel for corn against December futures trading at $4.45 produces a basis of -$0.25 per bushel. The same guide notes that weak, more negative basis signals the local market does not want grain delivered right away, while strong, less negative or positive basis signals the opposite — current, immediate demand at that location.
Why did basis swing so hard in 2024-2025?
The 2024-2025 marketing year produced an unusually wide basis move in parts of the Eastern Corn Belt. West central Indiana corn basis to July futures reached a 15-year low in September 2024, and soybean basis to July futures in the same region reached a five-year low that same month, according to Purdue's Center for Commercial Agriculture, published September 12, 2025.
Both crops then strengthened through the fall into December as futures prices moved, the Purdue review found. Corn basis weakened again from December through mid-February as futures increased, before reconverging with historical averages by spring. Not every location in the Eastern Corn Belt reached a five- or ten-year low, the center noted — the weakness was regional rather than uniform, underscoring that basis is a local number, not a national one.
For the 2025-2026 marketing year, Purdue's early indicators as of September 2025 showed corn basis starting stronger than the prior year, while soybean basis was running similar to the prior year but still below the historic average. The center expected basis to weaken or hold steady over the following month as harvest ramped up.
That swing matters at the farm gate because basis, not the futures board, is the part of a grain contract that reflects what a specific elevator or processor is willing to pay right now. A wide, unusual move like the one Indiana saw in September 2024 changes the return on delivering grain at harvest versus holding it in storage for a later window, independent of where futures happen to be trading.
What moves basis at the local level?
Basis is a local number because it reflects local supply and demand rather than the national commodity balance sheet that drives futures, per University of Missouri Extension. Two elevators forty miles apart, holding the same futures month, can post different basis levels because their storage capacity, processor demand, and rail or barge access differ.
Seasonality is part of the pattern. Missouri Extension's guide shows Kansas City soybean basis running strongest from October through the following August — the old-crop marketing window — and weakening rapidly as the new crop comes in during fall harvest. Basis on both corn and soybeans is best used, the guide notes, in deciding how and when to deliver grain rather than in forecasting an outright price level.
How do operators use basis in marketing decisions?
Basis and futures price are two separate decisions on a grain contract, and elevators offer tools that let an operator lock one without immediately locking the other:
- A basis contract fixes the local basis now while leaving the futures price open to be set later, against a specified futures month.
- A hedge-to-arrive contract fixes the futures price now while leaving basis open to be set closer to delivery.
- A cash forward contract fixes both cash price and delivery terms at signing, combining futures and basis into one number.
Farm Press Theme does not make sell or hold calls, price forecasts, or recommend which contract structure fits a given operation — those decisions depend on an operator's storage cost, cash-flow timing, and risk tolerance, and belong with the operator and their grain merchandiser.
Where can operators track basis month to month?
The U.S. Department of Agriculture's Agricultural Marketing Service publishes daily and weekly grain market news reports by region, covering cash bids and basis levels at elevators, processors, and export terminals across the country. Purdue's Center for Commercial Agriculture also points operators to its own Crop Basis Tool for monitoring local conditions against the historical range for a given elevator or region.
| Contract type | Futures price | Basis |
|---|---|---|
| Basis contract | Set later | Fixed now |
| Hedge-to-arrive | Fixed now | Set later |
| Cash forward | Fixed now | Fixed now |
FAQ
Is a negative basis a bad sign for a farm operation?
Not by itself. Negative basis simply means the local cash bid sits below the futures price, per University of Missouri Extension's guide — it reflects local supply and demand at that elevator, not a judgment on the operation.
Does basis move the same way every year?
No. Purdue's Center for Commercial Agriculture found Indiana corn and soybean basis reached multi-year lows in September 2024, then diverged from that pattern going into the 2025-2026 marketing year, with corn basis starting stronger and soybeans running near the prior year's level.
Where do the basis numbers elevators quote come from?
Local elevators set their own basis, but the U.S. Department of Agriculture's Agricultural Marketing Service publishes regional grain market news reports that let operators compare bids across nearby locations and track basis against recent history.
Can basis be locked separately from the futures price?
Yes. A basis contract fixes the local basis now while leaving the futures price to be set later against a specified delivery month, one of several standard grain contract structures elevators offer alongside hedge-to-arrive and cash forward agreements.
For a related agribusiness perspective, read What 100% bonus depreciation means for your next equipment purchase.
For more context, read How to read USDA crop reports without overreacting.