By: Editorial Team, StoneX Media
Crop tour scouts are walking fields with significant damage while the futures market trades as though the crop is fine, and the reason both readings hold is that they are pricing different things. Grain basis, not futures, is where a damaged local crop actually gets paid for, because the futures board prices the national aggregate and the cash market handles everything underneath it. July heat left visible tip back in corn across the areas it hit hardest, yet the national picture remains a good crop by any historical measure. For a producer in one of those hit areas, that combination looks like a market ignoring their reality, when in practice the response is arriving through a different channel.
With more than two decades spent across crop production, marketing and risk management, Arlan Suderman is Chief Commodities Economist at StoneX, where he oversees the firm's commodity market intelligence across agriculture, energy and metals. He works directly with the cash market mechanics that translate a national supply picture into the price a specific elevator pays on a specific day.
"Basis will take care of the differences in where there are problems, and where there are not. What the futures market is worried about is the total picture", Suderman says, drawing the line between the two markets as cleanly as it can be drawn. That division of labor is why a producer in a damaged area and an analyst looking at the national balance sheet can both be right. Specifically, futures respond to the aggregate supply available to the country, while grain basis moves on what is available to a particular elevator, processor or export terminal within its own draw area. Consequently, when local bushels are short, the buyers competing for them bid the cash market higher relative to the board, whatever the board itself is doing. The market response to a damaged local crop is real, it simply does not appear where most people look for it.
Suderman is direct that the aggregate story and the individual story diverge sharply this year, acknowledging the producers in hit areas have "some significant problems" even as the national crop holds up. At the same time, he is unsentimental about what that means for futures, noting that as far as the board is concerned "we're arguing about rounding errors. These are good crops". In contrast to the futures market's indifference, the cash market is where those rounding errors stop being rounding errors and start being a specific farm's revenue. Notably, that is also why the same national crop can support a firm basis in one region and a weak one in another during the same week. For a grain buyer, the practical consequence is that procurement cost is determined by draw area rather than by the headline crop number.
Access live prices, supply and demand data, and actionable market commentary focused on the Agriculture sector. Sign up for StoneX Market Intelligence today and see how our Agriculture insights can elevate your strategy.
Sign up for a Market Intelligence trial today
--- Written by Frédéric Guétin, StoneX Media Producer
--- Experts: Arlan Suderman, StoneX Chief Commodities Economist, and Mike Castle, StoneX Senior Commodities Economist
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
© 2026 StoneX Group Inc. all rights reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
Crop tour scouts are finding real damage in individual fields while the futures market keeps trading a good national crop, and both readings are correct at the same time. The gap between them is settled in the cash market, where basis does the work that a national average cannot.
August 20 – Stock futures slipped lower overnight amid rising commodity prices and higher Treasury yields. The VIX firmed to trade near 16 at this hour, while the dollar index trades near 98.7 after falling to a fresh three-month low this morning. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.20%. WTI crude oil rallied to trade near $88 per barrel, while Brent trades near $94 per barrel. The grain and oilseed sector added to yesterday’s gains in overnight trade as well.
Black Sea export revenue has collapsed and the pressure is landing on next season's winter wheat and rapeseed planting. Falling farm income, rising freight costs, Russian state support measures and European dryness now shape the acreage decision more than the war headlines do.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
