A basis that become less positive or more negative over time is said to widen or weaken. Basis describes two separate relationships for grain and livestock. Therefore, these enterprises are separated in the discussion below. Grain For grain, basis is typically used as an indication of current local demand. Weak basis indicates that the market doesn't want grain now, but the market may or may not want it later.
Strong basis indicates the market wants the grain.
Basis is best used in deciding how to sell. Table 1 shows what a grain producer should do given certain market situations. For instance, assume you are a corn producer who believes the corn price is high and basis is strong relative to historical patterns. Livestock For livestock, basis refers to the difference between supply and demand in a local location and supply and demand for the aggregate market. Like grains, basis contracts can be formulated for livestock.