Evening Arbitrage Update: September 23, 2025
Our afternoon manifold run captured an exceptional broadening in grain arbitrage, marking one of the largest single-day expansions in our September dataset. This surge is driven by a confluence of infrastructure stress, binding insurance price floors, and unique export dynamics.
Active Opportunities
218
Growth vs. Morning
+173%
Average Profit
$0.083/bu
Median Distance
85 mi
The most significant change was the sheer volume of new routes, which more than doubled, accompanied by a notable increase in average profitability.
As logistical pressures mount, reliance on trucking slightly increased, reflecting constraints in barge and rail capacity for short-to-medium hauls.
Today's market shift wasn't random. It's the result of record supply colliding with logistical bottlenecks and policy effects. This process flow illustrates how these factors interact to create localized basis slippage and the very arbitrage opportunities we flag.
1. Record Supply
USDA forecasts suggest record-scale U.S. corn output for 2025.
2. Logistics Friction
Low river stages and high freight costs constrain movement.
3. Market Pressures
Insurance deadlines & uneven export demand add urgency.
4. Arbitrage Opportunity
Localized price dislocations create profitable short-haul routes.
USDA's freight cost indices confirm the high cost of moving grain. With barge capacity limited by low river levels (index at 219), more expensive truck and rail modes are picking up the slack, influencing route profitability.
A vast majority of the new opportunities sit at or below federal crop insurance price floors. This indicates that the ~$12B program is creating a hard baseline for prices, allowing arbitrage to thrive in dislocations above this level.
Soybeans and Corn dominate the available routes, reflecting their large supply and sensitivity to the current export and logistical pressures.
The absence of Chinese commitments for U.S. soybeans is a significant market anomaly. This lack of a primary buyer weighs on Mississippi River basis prices, creating opportunities for domestic crush and other export corridors.
U.S. Soybean Commitments to China
0
(Latest USDA Weekly Ranking)
The median haul distance increased intraday, a typical pattern where the most localized, efficient routes are taken first, leaving slightly longer (but still profitable) routes available as spreads widen.