U.S. cash corn markets were approaching 28-month highs on Monday, powered by a 60-cent rise in prices, during December.

"Basis levels for corn continue to be firm from slow farmer cash sales, which is typical for this time of year," said Lee Gaus, an analyst with the International Futures Group.

On average, daily readings of domestic corn basis had improved by an additional 1/2 cent per bushel, entering Monday's trading session, to further perpetuate an already-extended trend. Farmgate prices for corn have now topped $5.50 a bushel for the first time since Aug. 21, 2008.

Daily interior basis had also strengthened by an average of 1 1/2 cents for soft red winter wheat, 1 cent for spring wheat, and 1/4 cent for soybeans/hard red winter wheat; but had also weakened by 1/2 cent, in the case of grain sorghum Monday.

"Bean basis is weaker at the river, but some crushers and resellers are pushing to get coverage," said FCStone.

U.S. grain futures also added elevation to farmgate prices overnight, registering cash-contract gains of around 5-6 cents for corn/oats and 11-15 cents for soybeans/wheat.

"This will be a short week for many traders, as the board [CBOT] will be closed Friday for the Christmas Holiday. It is not uncommon to see the majority of the week's trade activity happen early in this situation," said MaxYield commodity trade advisor Karl Setzer. "Many traders will actually exit the pits this week and not return until early next month."

National cash price indices maintained at the Minneapolis Grain Exchange last closed at $12.47 1/4 for soybeans, reflecting an average basis of -51 1/2 cents relative to settlement of January Chicago Board of Trade futures. Farmgate prices also now average $5.55 3/4 for corn (-40 3/4 cents versus March CBOT), $6.90 1/2 for hard red winter wheat (-$1.21 1/4 vs. March Kansas City Board of Trade), $6.76 1/2 for soft red winter wheat (-80 1/4 cents vs. March CBOT) and $8.02 1/2 for hard red spring wheat (-39 1/2 cents vs. March MGE).


Highly variable weather conditions were impacting the Great Plains on Monday.

"A winter storm warning is in effect for today in much Montana and the North Dakota, while today's high temperatures will exceed 80 degrees Fahrenheit in parts of Texas," noted USDA meteorologist Brad Rippey. "A portion of the central and southern Plains' winter wheat crop remains stressed by drought, wind, and temperature extremes."

Snow was spreading across the upper Midwest Monday, adding to previous accumulations of 1 to 2 feet, while making cash grain movement even more difficult.

Chilly temperatures gripped the southern Atlantic States, but warmer air was expanding across the western and central Gulf Coast States.

"Developing drought remains a concern in the lower Southeast, particularly across Georgia and Florida," added Rippey.

Stormy weather is forecast for much of the western U.S. this week, while dry conditions dominate the southern Plains.

"Elsewhere, early- to mid-week snow will spread from the northern Plains and upper Midwest into the Appalachians," said Rippey. "Toward week's end, a developing winter storm will result in widespread precipitation across the nation's mid-section."

The National Weather Service 6- to 10-day outlook for Dec. 25-29 calls for a continuation of cold weather in the East, while near- to above-normal temperatures will prevail along and west of a line from Texas to Wisconsin.

Near- to below-normal precipitation across the majority of the U.S., will contrast with wetter-than-normal conditions in the West.

-By Gary Wulf; Dow Jones Newswires; Gary.Wulf@dowjones.com