Soybean futures have finally given producers something positive to look at. After months of grinding lower, the market has staged a rally, pulling November futures off their lows and giving cash prices a boost on paper. Yet in the countryside, many growers are asking the same question: “If the board is higher, why are local bids worse?”
It’s a fair frustration — especially when futures are moving in the right direction but the basis at your elevator or processor is doing the opposite. Understanding why this disconnect happens requires looking at both sides of the market: futures — which trade supply and demand — and basis — which reflects local realities.
The recent rally in soybean futures has been fueled by a combination of fundamentals. On the supply side, the corn yield debate spilled over into soybeans. USDA’s latest projections still point to a record-large crop, but
private tours and field reports are uncovering pockets of disease pressure and yield variability
— soybeans included. That has raised doubts about whether final production will meet those lofty expectations.
On the demand side, the bright spot remains domestic crush. Expansion in renewable diesel continues to underpin soy oil, but government policy, particularly the EPA’s handling of Small Refinery Exemptions, adds another layer of uncertainty. If exemptions are widely granted, it reduces mandated biofuel blending and directly dampens soy oil demand. Conversely, tighter SRE approvals keep the demand base firm. That policy back-and-forth has become a swing factor for the soy complex, capable of influencing crush margins and shaping demand outlooks just as much as weather or yield headlines.
Other headlines have also added a layer of support. U.S. soybeans remain the cheapest option on the global market, which has attracted interest from a variety of international buyers. That demand has helped offset some of the sluggishness from China and is something the market will need to see continue, particularly as harvest approaches.
China, meanwhile, has continued to rely heavily on South American supplies. But the reality is that Brazil’s new crop won’t even be in the ground until September/October. Any hiccup in planting or weather in the months ahead becomes a risk premium that funds may not be willing to ignore.
Soymeal has also played a role. Stronger crush margins and reports of Argentine meal cargoes struggling to meet Chinese specs have shifted attention back to U.S. supply. Meal led the soy complex higher in recent sessions, and when soybeans are cheap relative to corn, funds don’t need much reason to cover shorts.
The net result: Soybean futures caught a bid from a mix of production uncertainty, domestic and export demand, seasonal South American risk, and by-product headlines. That’s the “rally” producers see on the board. But the basis tells a different story. Local bids are not moving higher with the board; in many cases, they’re slipping lower. Why?
At its core, basis is simply the difference between local cash bids and the futures market. It reflects the cost of getting grain from your location to the point of end use — whether that’s an export terminal, crush plant or feedlot. Strong basis means local buyers need grain and are willing to pay up; weak basis signals the opposite. While futures capture the global supply-and-demand picture, basis tells the local story.
For growers in our region, the demand market looks different than it does in the heart of the Corn Belt. The Pacific Northwest is an export-driven outlet, which means our cash bids are tied directly to whether export programs are active at West Coast terminals. When vessels are scheduled through the PNW, elevators need to pull grain aggressively and basis strengthens. When those programs are light, bids soften quickly, regardless of what the futures market is doing.
For growers in our region, the demand market has its own quirks. Being tied to the Pacific Northwest export channel means local bids are highly sensitive to where the export program is centered. Right now, most of the U.S. soybean export program is moving through the Gulf. That’s where the big sales are, and it has left the PNW on the sidelines. Elevators in our area don’t need to source aggressively when demand isn’t flowing in this direction. As a result, our basis has weakened even as the futures board has rallied. In short, the export business is strong — but because it’s centered out of the Gulf, it isn’t benefiting our local market.
Transportation costs also play a role. Rail freight to the PNW can be expensive, and when spreads favor Gulf shipments, buyers naturally prioritize that channel. Asian buyers like China, Japan and South Korea are the key customers that drive PNW demand. Until their business shifts more meaningfully to West Coast loadings, local elevators will have little reason to firm up bids. That leaves producers in the PNW dealing with the reality that futures may rally, but without a local export pull, the basis remains soft.
For producers, the path forward requires discipline and awareness of both futures and basis. A board rally doesn’t always translate to higher cash bids, and this fall is proving that point. If you need to move soybeans, focus on shopping bids and capturing premiums where they exist. Elevators and processors with specific needs — especially for crush or export coverage — will occasionally offer a stronger basis even when the broader countryside feels weak.
If you have
flexibility becomes your advantage. Holding soybeans into the post-harvest window could allow the basis to recover, especially if export business eventually shifts toward the PNW. In the meantime, watch deferred contracts to secure board strength when it’s offered, while leaving the basis open to improve later. Layering in sales on rallies, while keeping an eye on basis improvement, helps balance risk and reward.
If you are making cash sales at harvest, consider re-owning bushels with call options. This allows you to participate in further upside if the market extends higher. This approach can protect your downside by locking in cash sales, while still keeping a toe in the market should momentum continue higher into the end of the year.
In the end, this rally is a reminder that soybeans trade on two very different stages — the global futures market and the local cash market. Futures have bounced on risk and speculation, but the basis tells the real story of supply, space and demand in our own backyard. For producers, success this year won’t come from watching the board alone, but from matching sales to local bids, capturing premiums when they surface, and using tools like calls to stay in the game if the rally extends. Flat price matters, but in 2025, it’s the combination of futures and basis — global headlines and local realities — that will define the bottom line.
Allison Thompson is a market analyst with The Money Farm located in Ada, Minnesota. She previously has worked as a Farm Business Management instructor and is active on her family’s Mahnomen, Minnesota, grain farm. She recently purchased The Money Farm and has turned her experiences in the fields and classroom into a career where she is able to help producers facing the challenges of today’s markets.