Basis sinking faster than the Mississippi at Memphis
By Mary Hightower
U of Arkansas System Division of Agriculture
Sept. 3, 2025
Fast facts:
- Soybeans most affected by Mississippi River level drop
- USCG enacts restrictions on barges
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LITTLE ROCK — As the numbers on the Mississippi River gauge at Memphis, Tennessee, sink, so does soybean basis, but at a faster clip than in previous years, said Hunter Biram, extension economist with the University of Arkansas System Division of Agriculture.
Basis is the difference between a local cash price for a commodity such as soybeans, and its futures contract price. Over the last three seasons, agricultural economists have examined a significant trend: As goes the Mississippi River levels at Memphis, so goes basis.
“Right now, we're not only seeing basis fall below where it normally would be, but also below the level that we start to see when these river levels get to that minus five point,” Biram said.
On Tuesday, the gauge at Memphis hit the negative numbers at minus 0.27 feet. The “low water” threshold at Memphis is minus 8 feet.
Lack of rain upstream in the upper Mississippi Basin and the Ohio River have contributed to the problem. Rankings by the Iowa Environmental Mesonet shows many counties bordering the Mississippi in Missouri, Illinois and Kentucky, and in areas up the Ohio River in Indiana and Ohio, to have their driest or top five driest years ever.
The U.S. Drought Monitor map shows those same areas being abnormally dry or in drought.
Barge restrictions
The U.S. Coast Guard on Tuesday issued low-water restrictions between Caruthersville, Missouri, to around Angola, Louisiana, on the lower Mississippi. These restrictions include having drafts no deeper than 11 feet for northbound tow barges and no greater than 11.5 feet for southbound barges. There are additional restrictions for the number of barges that can be included in a tow. Fewer barges mean less soybeans, rice and corn headed to New Orleans.
Biram said there were multiple factors driving the drop.
“I think that grain elevator operators on the river are anticipating the river to fall to those low levels which would then trigger those high barge freight rates,” Biram said. “I also think the fact that China hasn't bought any new crop soybeans is also playing into this.”
In the U.S. Department of Agriculture’s most recent “Export Sales” report on Aug. 21, “the U.S. still had no sales of soybeans to China,” said Scott Stiles, extension economics program associate for the Division of Agriculture. “A year ago, we had already sold them 2.9 million tons by this time.
“In total thus far, the U.S. has sold 7.2 million tons of soybeans to all destinations,” he said. “A year ago, we had already sold almost 10.2 million tons. The actual difference in sales between this year and last year is 2.93 million tons. Clearly, China is the missing 2.9 million tons.”
If not China, then who’s buying?
“The U.S. has sold soybeans to 28 known foreign markets. Mexico is the top buyer of the 2025 crop soybeans so far with 1.83 million tons. Rounding out the Top 5 would be: Pakistan, Taiwan, Egypt, and Japan,” Stiles said. “Soybeans are mostly crushed for cooking oil and the meal is used for livestock feed. Increasing amounts of soybeans are being used for biodiesel.”
Beans on hand
Some farmers can weather the lowering basis by storing their soybeans until prices become more favorable. However, does that create a backlog of beans that might, in turn, put more downward pressure on prices?
“Without a China trade deal and a firm agreement to buy some U.S. soybeans, we could see soybean ending stocks increase,” Stiles said. “Currently, 2025/26 stocks are estimated at a fairly tight 290 million bushels; down from 330 million last year on a large reduction in planted acres this year.”
In August, USDA projected soybean exports at 1.7 billion bushels.
“Recognizing the trade uncertainty with China and lower U.S. soybean production, the 1.7 billion export projection is down 170 million bushels or 9 percent from 2024,” Stiles said. “Ideas on exports are certainly subject to change and much depends on China and U.S. trade negotiations.”
Stiles said “industry sources seem to believe we may not see soybean purchases from China until a formal trade deal is hammered out and that may not occur until November.
“By then, a few months of the key U.S. export window has passed,” he said. “The September to January timeframe is the best opportunity the U.S. has to ship soybeans to China before the Brazil harvest is available.”
Brazil produces 40 percent of the world’s soybeans, making it No. 1 in production and exports. The U.S. is No. 2, growing 28 percent of the world’s soybeans.
Rice and corn
Soybeans aren’t the only crop affected.
The U.S. is projected to export about 2.88 billion bushels of corn from the 2025 crop which is about 18 percent of total demand. Mexico is the primary buyer and much of that corn is shipped south by rail, Stiles said.
“The U.S. is expected to see record corn production this year and that is certainly pressuring prices,” he said. “Fortunately, corn export demand for the 2025 crop is off to a very solid start with sales to date double what they were at this time last year.”
Last year, of the corn exports loaded on a boat, 63 percent of the total was shipped to the gulf via the Mississippi, while 35 percent went out of the Pacific Northwest.
The news is not quite so good for rice.
“Rice prices are hovering near five-year lows,” Stiles said. “I would expect growers to put the crop in the bin this fall and look for better market opportunities after harvest. This year's Mid-South rice crop is going to trickle in longer than usual. Similar to soybeans, 2025 rice export sales are off to a very slow start. Presently, long-grain export sales are half of what they were at this time a year ago.”
Long-grain rice exports are expected to be about 149 million bushels or 33 percent of total demand.
“Generally, the larger portion of long-grain exports is rough rice and practically all of that goes to Mexico, Honduras, Guatemala, Nicaragua, El Salvador,” Stiles said. “Some to Venezuela and Colombia occasionally. The long-grain milled rice goes to Haiti and Iraq mostly.”
Read more about the topic at Southern Ag Today.
To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu/. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on three campuses.
Pursuant to 7 CFR § 15.3, the University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services (including employment) without regard to race, color, sex, national origin, religion, age, disability, marital or veteran status, genetic information, sexual preference, pregnancy or any other legally protected status, and is an equal opportunity institution.
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Media contact: Mary Hightower
mhightower@uada.edu