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WHAT IS THE ISSUE?

The margin between corn and soybean prices at collection points in the Midwest and the Gulf price reflect the 

costs of moving these bulk commodities from farming regions to export facilities. These margins, or crop basis, 

depend on many factors, including the transportation network, network disruptions, storage costs, and volume 

of material being moved. The margins also depend on the costs—often associated with barge availability—of 

moving goods along the transportation network. Weather also plays a role. Weather can affect yield in the 

region and around each collection point. Weather factors can also damage grain quality, impair barge traffic 

by making river levels too high or too low for normal volumes, and sever routes for other modes (e.g., by 

flooding). With the climate changing rapidly, these factors must be better understood so that analysts can 

estimate the influence of climate change effects on crop basis and commodity prices in general.

HOW WAS THE STUDY CONDUCTED?

The effect of weekly variations in temperature and precipitation on crop basis of each collection point in the 

central region1 was estimated in a multistep process. First, an econometric panel data model was developed 

for the period 2008-2020 that explains changes in basis as a function of local precipitation, flooding and low 

1 A 13-State region congregated around the headwaters of the Mississippi River in the Upper Midwest.

This is a summary of “Weather Extremes, Infrastructure, and Its Impacts on U.S. Corn and Soybean Basis 

Levels,” by Theodoros Skevas, Benjamin Brown, and Wyatt Thompson of the Division of Applied Social Sciences 

at the University of Missouri. This research was supported by Cooperative Agreement Number 20-TMTSDMO-0002 with the U.S. Department of Agriculture, Agricultural Marketing Service. The authors want to thank 

Vince Breneman for providing some of the data used in the analysis and Seon Yong Kim, Mohammad Mobarok, 

and Emily Scully for their assistance in processing and analyzing the data. The full paper is available at: 

https://www.fapri.missouri.edu/publication/weather-extremes-infrastructure-and-its-impacts-on-u-s-cornand-soybean-basis-levels/.

The findings and conclusions in this publication are those of the author(s) and should not be construed to 

represent any official USDA or U.S. Government determination or policy.

Weather Extremes, Infrastructure, and Its Impacts 

on U.S. Corn and Soybean Basis Levels (Summary)

Delmy Salin

REPORT SUMMARY
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water level proxies, crop yields, and control variables (e.g., diesel price, ethanol intensity). Local precipitation 

captures the immediate effect of a normal or abnormal weekly rainfall on the local cash price. As explained 

above, river flooding and low water levels affect basis by disrupting grain transportation. Yield captures the 

local crop supply effect on basis. Nonlinear or disproportionate effects were included in the analysis (in the 

case of local precipitation and yield) to capture the effect of extreme rainfall events and very high crop supply 

on basis.

Next, econometric models were developed that link weather conditions to yield (to gauge the demand for 

transportation services) and link precipitation to river water level (to test if low or high water conditions reduce 

barge travel). The first connection was examined from the perspective that weather conditions affect both the 

planting dates and progress of a crop. These factors can, in turn, impact crop yields. The planting progress and 

water level estimates accounted for the potential non-linear effects of weather variables on planting progress 

and river water level.

Finally, the analysis made use of econometric results of the basis, planting progress (and inferred yield), and 

water-level models, along with data on climate change scientists’ projections of temperature and precipitation. 

Using all of this data, the analysis simulated the effect on basis of projected climate-change scenarios of 

temperature and precipitation.

WHAT DID THE STUDY FIND?

Impact of Weather on Planting Progress, Yield, and River-Water Levels

Results suggest that warming weather can accelerate planting, while precipitation slows planting progress. The 

researchers found rising precipitation often improved crop yield, depending on when the crops were planted. 

However, levels of precipitation that were far above average negatively impacted crop yields. 

The effect of temperature on crop yields was more mixed. In early weeks of the corn growing season, higher 

than average temperatures positively affected yields, while in later weeks, high temperatures negatively 

affected yields. For soybeans, the opposite pattern was observed—i.e., early high temperatures negatively 

affected yields, while late high temperatures positively affected yields. Lastly, and as expected, results showed 

that rising precipitation levels correlated to higher river water levels.

Determinants of Crop Basis

The main results of the analysis of corn and soybean basis determinants are as follows:

• Corn and soybean basis is significantly affected by local precipitation, yield shocks, river water variables, 

and other external factors such as ethanol intensity and diesel price.

• High local precipitation leads to lower corn basis.

• High local precipitation causes soybean basis to rise initially and then fall.

• Low corn yield (less volume) leads to higher corn basis.

• High corn yield (more volume) leads to lower corn basis.

• Low soybean yield (less volume) leads to higher soybean basis.

• Regarding the effects of river traffic disruption, both high and low water reduce basis for upriver points.
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Climate-Change Simulation Results

Climate change implies changes in local precipitation; crop yield (through changes in planting progress, and 

growing season weather); and river levels (i.e., more or fewer days with high or low water levels). Climate 

change scientists’ projections of temperature and precipitation were used to simulate the effects of climate 

change on planting, yield, river levels, and basis. The simulations helped connect climate-change-related 

infrastructure strain with the gap between farm and buyer prices. The main results of the simulation-based 

analysis are as follows:

• Climate change—mainly, in the form of rising temperatures—shifted planting progress (of both corn

and soybeans) earlier.

• Changes in weather variables increased average corn yield slightly and reduced average soybean yield.

At the same time, yield distributions narrowed (especially for corn).

• Climate change scenarios showed small increases in the number of floods and reductions of the

number of low-water days along the Mississippi and Illinois Rivers.

• Corn basis decreased (by 0.05 cents, on average)—mainly driven by precipitation change—in the highchange climate scenario.

• Soybean basis was found to increase (by 2.6 cents, on average) as a result of climate change.

Temperature change was the main driver of this increase.

• Calculating the impacts of local precipitation, yield, and river water conditions showed yield to be the

main driver of changes in both corn and soybean basis.

• The ranges of corn and soybean basis widen in all four climate change scenarios.

Author Contact

Theodoros Skevas

skevast@umsystem.edu

573-882-8496

USDA Contact

Delmy Salin

Delmy.Salin@usda.gov

Preferred Citation: Salin, Delmy L. November 2022. Weather Extremes, Infrastructure, and Its Impacts on 

U.S. Corn and Soybean Basis Levels (Summary). U.S. Department of Agriculture, Agricultural Marketing 

Service. Web. <http://dx.doi.org/10.9752/TS355.09-2022>

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