Grain Basis Calculator
Cash minus futures to signed basis read.
What it does
Grain checks split into two bets: futures direction and local basis. Basis is cash minus futures, carrying freight, storage, and hometown demand inside one signed number. Negative usually means normal; positive means local hunger.
The tool above subtracts futures from cash with sign kept and interprets weak versus strong local markets. A 4.85 cash under 5.10 futures reads -$0.25: ordinary harvest pressure, not a personal insult.
Extension marketing guides with farm-bureau market resources teach basis tracking by delivery month. Storage pays when basis strengthens into later months; trucking eats the same spread in reverse.
Watch it monthly per delivery slot. Widening basis rewards bins and patience; narrowing basis rewards trucks and speed. Futures set the ocean; basis sets your beach.
How to use
- Enter local cash price.
- Enter futures for the delivery month.
- Read signed basis per bushel.
- Read weak or strong interpretation.
- Track monthly per delivery slot.
- Act on storage and freight inside it.
Formula
- cash
- Local cash bid per bushel.
- futures
- Futures price same delivery month.
Sign kept always: negative is the normal discount under futures, positive a local premium. Compare same delivery months; storage, freight, and handling live inside the spread.
Worked example
Example: $4.85 cash, $5.10 futures
$4.85 cash against $5.10 futures.
- Cash bid is $4.85, futures $5.10.
- Basis: 4.85 - 5.10 = -$0.25.
- Negative reads below futures: weak local.
- Storage and freight live inside it.
- Track by delivery month, not yearly.
Reference table
| Basis | Read | Move |
|---|---|---|
| Above +$0.20 | Strong local | Sell into it |
| Near zero | Even | Normal flow |
| -$0.10 to -$0.30 | Typical carry | Weigh storage |
| Under -$0.40 | Weak local | Store or haul farther |
Limits
- One snapshot. Spreads move with carry and harvest.
- Local only; elevators differ by miles.
- Storage math sits outside the spread.
- Marketing advice needs your books.
Common mistakes
- Comparing across delivery months.
- Ignoring freight inside wide basis.
- Storing at negative carry blindly.
- Chasing futures while basis bleeds.
- Selling harvest lows yearly.
Try it yourself
Quick checks. Answers sit tucked under each question.
$6.20 cash against $5.90 futures?
Basis is 6.20 - 5.90 = +$0.30/bu. Above futures: strong local demand.
$5.00 cash against $5.00 futures?
Basis is 5.00 - 5.00 = $0.00/bu. Even with futures: normal flow.
Questions
What is basis?
Cash price minus futures price, usually negative from freight and storage. Positive means inverted local demand beating Chicago.
How is it figured?
Cash minus futures in dollars per bushel with sign kept. A 4.85 cash over 5.10 futures reads -$0.25, weak local demand.
What moves basis?
Transportation, storage, handling, and local supply versus demand. Harvest pressure widens negative basis; end-user bidding tightens it.
How do farmers trade basis?
Locking futures while leaving basis open (hedge-to-arrive), or locking both with forward cash contracts. Basis-only deals isolate the local leg.
Does basis change by month?
Yes, by month: old-crop versus new-crop spreads swing with carry and harvest pressure. Compare same delivery months across years.
What should widening trigger?
Elevator bids, truck rates, bin space, and drying charges around the number. Wide basis rewards on-farm storage with carrying costs.