Can you make my article more concise while leaving it in paragraph format and between 1000 to 1500 word count.

Austin Belman
ACE 527
Harvest Time and Corn Prices: How Illinois Farmers Navigate Local and Futures Markets
Introduction
Every fall, as the leaf’s change, nights get shorter, and football every Sunday, the great state of Illinois fields peak with ripening corn, farmers face a pivotal decision: when to sell their harvest to maximize profits. This choice of when balances on their understanding of the "basis” which is the difference between local cash prices at the local grain elevators and global price which is captured by futures market trends. The basis reflects local supply and demand conditions, thus offering farmers critical insights into the best times to sell or store grain. In Illinois, a state famous for its corn production, breaking down the complexity of basis behavior during harvest periods can help stakeholders with the ability to make informed, profitable decisions.
This article examines 20 years of data on how the local corn basis in Illinois behaves during harvest and non-harvest periods across three major locations: Decatur, Peoria, and East St. Louis. This study aims to discover relationships that simplify the regional market dynamics and offer transparent moments for future market trends. Thus, comprehending these relationships is crucial for farmers, traders, and policymakers aiming to optimize strategies in the dynamic agricultural economy.
What is Basis, and Why is it Important for Farmers?
Basis=Cash Price-Future Prices
The basis is the difference between the local cash price of corn and the price set in the futures market. It’s a valuable tool for farmers because it reflects unique local factors—like supply and demand—that the global market doesn’t account for. A stronger basis means local demand for corn is high, while a weaker basis suggests there’s plenty of supply in the area. By monitoring the basis, farmers can decide whether to sell their corn immediately or wait for a better price, helping them maximize their earnings from the harvest.
Data Overview
This study utilizes data on local basis values for three major corn market locations in Illinois—Decatur, Peoria, and East St. Louis—alongside corresponding futures price data, spanning 20 years (2005–2024) of harvest and non-harvest periods. Local basis values, collected daily from regional grain elevators, represent the difference between local cash and futures prices. Specifically, DEC_BASIS reflects the Decatur market where Archer Daniels Midland (ADM) operates a major grain facility; PEO_BASIS covers Peoria, another key ADM market on the Illinois River; and ESL_BASIS captures East St. Louis, where Cargill runs a major grain facility near the Mississippi River. Futures price data, obtained from the Chicago Mercantile Exchange (CME) Group, include FUT_1 (nearest delivery month) and FUT_2 (second nearest month). Relative futures prices were calculated by aligning cash prices minus basis to match either FUT_1 or FUT_2. The harvest period was defined based on the typical Illinois corn harvest season, enabling comparison between harvest and non-harvest periods.
Time Series Plot

The time series plot illustrates corn basis and futures price trends across Decatur, East St. Louis, and Peoria over 20 years, highlighting regional and seasonal dynamics. In Decatur, the basis shows consistent strength due to proximity to ADM processing facilities, while East St. Louis experiences sharper volatility driven by river traffic and export dynamics. Peoria exhibits more stable trends, reflecting predictable river access and infrastructure.
During harvest periods (shaded areas), the basis weakens across all locations due to increased supply, while futures prices remain stable, driven by global markets. Post-harvest, the basis strengthens as local supply diminishes and demand rises, offering opportunities for farmers to store grain and sell later at higher prices. Decatur’s consistent basis supports immediate sales, East St. Louis requires careful timing due to volatility, and Peoria’s steady trends favor long-term planning. Overall, the basis acts as a localized indicator of market conditions, complementing global futures prices and guiding farmers in optimizing their strategies.


Mean Basis Comparison: Harvest vs Non-Harvest

The Mean Basis Comparison of Harvest vs Non-Harvest plot reveals key insights into how basis values fluctuate across Decatur, East St. Louis, and Peoria during different periods. During harvest, Decatur’s basis is relatively weak at 0.02, reflecting abundant supply, but strengthens significantly to 0.13 in the non-harvest period as local demand increases. East St. Louis shows the most drastic shift, with a negative basis of -0.07 during harvest due to oversupply, rising sharply to 0.13 post-harvest, indicating a tighter market. Peoria experiences a more modest change, with a negative harvest basis of -0.06 improving slightly to 0.01 in the non-harvest period. These trends highlight the seasonal impact of supply and demand: harvest periods tend to weaken basis due to oversupply, while non-harvest periods strengthen it as stocks dwindle and demand rises. For farmers, this underscores the importance of storage and timing, as selling during the non-harvest period generally yields better returns. Understanding these dynamics helps farmers, traders, and policymakers make informed decisions to optimize profitability and efficiency in Illinois’s vital corn markets.

Crop Basis and Harvest Timing

The timing of harvest—whether early or delayed—plays a critical role in shaping basis values. By examining crop basis behavior and crop progression differences for 2010 and 2019, we see how variations in harvest timing affect local supply and demand dynamics.
2010: Early Harvest and Basis Spikes
In 2010, the harvest progressed significantly ahead of the historical average, peaking around week 39. This rapid pace created localized supply constraints, particularly in Decatur, where basis values spiked sharply due to strong demand at regional processing facilities. Peoria showed stable basis values, reflecting balanced supply and demand, while East St. Louis experienced weaker, negative basis values, likely due to regional oversupply. The early harvest highlights how concentrated supply inflows can lead to temporary shortages and higher basis in high-demand areas.
2019: Delayed Harvest and Gradual Basis Recovery
In contrast, 2019’s delayed harvest lagged behind the historical average, with the largest deficit around weeks 40–41. This slower pace initially weakened basis values, as buyers faced less competition for grain. However, as harvest progressed later in the season, East St. Louis saw a notable improvement in basis values, moving from negative to positive by week 43, reflecting tighter supply conditions. Decatur’s basis remained stable and positive throughout, while Peoria continued to show minimal fluctuation.
Early vs. Delayed Harvest
The comparison highlights how an early harvest can drive sharp, short-term increases in basis due to localized shortages, while a delayed harvest spreads supply over time, suppressing basis early but allowing for gradual recovery. Farmers can use these trends to strategically time sales or storage decisions based on crop progression relative to historical norms.
Correlation Analysis
The Correlation Matrix provides insights into how the relationships between local basis values (Decatur, East St. Louis, Peoria) and relative futures prices vary during harvest, non-harvest, and across the entire period.
During the harvest period, correlations are generally moderate. The Decatur and Peoria basis values show significant positive correlations with relative futures prices (0.47 and 0.49, respectively), suggesting that futures prices somewhat influence cash prices at these locations during this time. Interestingly, East St. Louis shows a weak negative correlation (-0.08), possibly due to oversupply in the region overwhelming any influence of futures markets. Correlations among basis values across locations (e.g., Decatur and Peoria) are moderate (~0.45-0.49), reflecting some regional interdependence during harvest.
In the non-harvest period, correlations between futures prices and basis values strengthen significantly, especially for Decatur (0.78) and Peoria (0.75). This indicates that as markets stabilize post-harvest, futures prices better predict local cash prices. Correlations among basis values also increase, reaching as high as 0.92 between Decatur and Peoria. These stronger correlations suggest that during the non-harvest period, market dynamics are more interconnected, with futures prices and local basis reflecting tighter market conditions.
Across the entire period, the correlations mirror the non-harvest trends but are slightly dampened. Decatur and Peoria maintain strong correlations with relative futures prices (0.74 and 0.7, respectively), while East St. Louis shows a weaker relationship (0.16). This reflects how futures markets predominantly influence Decatur and Peoria, while East St. Louis's local cash prices are influenced by other regional supply and demand factors.
These findings highlight the dynamic relationship between futures markets and local basis values. Farmers in Decatur and Peoria can rely more on futures prices as a guide for marketing decisions, especially outside of harvest. Meanwhile, those near East St. Louis may need to pay closer attention to local market conditions. This underscores the importance of understanding both regional and global factors when strategizing corn sales.
Conclusion
The analysis of basis trends across Decatur, East St. Louis, and Peoria provides valuable insights into the dynamics of Illinois corn markets, particularly during harvest and non-harvest periods. This 20-year study highlights key patterns: basis weakens during harvest due to oversupply and strengthens post-harvest as demand rises and local stocks tighten. Decatur, with its proximity to major processing facilities, offers relatively stable and favorable conditions, while East St. Louis's market demonstrates greater volatility, and Peoria shows consistency suitable for long-term planning.
For farmers, understanding these localized trends is crucial for maximizing profitability. The findings underscore the importance of timing and storage strategies—selling during the non-harvest period generally yields stronger basis values, while careful observation of early or delayed harvest timing can provide additional market opportunities. Futures markets also play a critical role in shaping local cash prices, particularly during non-harvest periods when market stability increases.
Moving forward, stakeholders in Illinois's corn markets can leverage these insights to optimize decision-making. Policymakers and market analysts may explore interventions or tools to mitigate volatility during harvest, while traders can refine strategies that balance local basis trends with global futures markets. Future research could build on this analysis by incorporating additional variables such as weather patterns, transportation logistics, or export demand to further refine predictions.
Ultimately, understanding the interplay between local basis values and global market trends empowers farmers, traders, and policymakers to navigate the complex agricultural landscape, ensuring greater efficiency and profitability in one of Illinois's most vital industries.


 
References
	U.S. Department of Agriculture (USDA) Market Reports
	Chicago Mercantile Exchange (CME) Group Futures Data
	Illinois Department of Agriculture Crop Progress Reports