You can pick any spot you want but try and use the smallest drill that the blade can use.
I usually pick it at a point. You usually have to do a little sanding so it is not noticeable.
Another technique I use is to cut across the wood in the direction of the grain and then glue back together with a little CA.
There is a video of making a basket at
https://www.youtube.com/watch?v=OXW-FfxCXiAFollow the link to get the pattern and you can see the lines at the bottom were you cut an glue back together.
There is book by Monroe Dutcher on making baskets and he uses same technique.
PS: I made about a dozen of these baskets as they are great hostess gifts.