Soybean Quality and Market Factor Influence on North Dakota Origin Basis Values
Abstract
In North Dakota, origin soybean basis values place risk on market participants involved with trading the commodity. Researchers study market factors that influence origin basis values in order to better understand basis movements. Quality is an important component of basis values, but soybean quality in the form of crude protein and essential amino acid content may be implicitly reflected in the basis rather than explicitly in the flat price. A panel data set is created comprised of ten years of data ranging from 2009-2018 and across eight North Dakota agricultural statistics districts. This thesis utilizes principal component analysis to identify principal components among essential amino acid variables. Panel regression models using fixed effects are employed to identify the influence soybean quality and other market factors have on origin soybean basis values in North Dakota. Results indicate that essential amino acids and protein implicitly influence North Dakota origin soybean basis values.