Tuesday, June 18, 2019

Grains—Cash Prices North and South of St. Louis: It's Complicated

With the Mississippi River only now starting to reopen along its length there are notable price differentials between the lower Mississippi, where export cargoes that have already been contracted have to be filled, and the northern reaches where grain in storage is hitting bids to supply working capital.

From DTN Progressive Farmer:

Cash Market Moves
Flooding Keeps Chokehold on Barge Traffic, Stalling Grain Shipments
The long, record-breaking flooding of 2019 on the Mississippi River system has taken a toll on farmland, personal property and the many cities and towns that line the rivers. It has also disrupted commerce on the rivers that depends on barges to move product, especially fertilizer, grain and oilseeds, to and from the Gulf of Mexico and other points along the way.

Only 12 barges have made it to St. Paul, Minnesota, the northernmost point on the Upper Mississippi River, so far this shipping season. The Motor Vessel Aaron F. Barrett, pushing 12 barges heading to St. Paul, Minnesota, locked through Lock and Dam 2 near Hastings on April 24. Since then, flooding and ensuing lock closures have kept most of the entire Upper Mississippi River closed. Most recently, the closure of the St. Louis Harbor shut down barges from moving up or downriver through there.
Upper Mississippi River Locks 11 through 27 from the Illinois-Wisconsin boarder to St. Louis have been closed on and off over the past three months due to flooding conditions. As of June 16, the United States Army Corps of Engineers (USACE) reported Lock and Dam 24, Lock and Dam 25, Mel Price Locks and Dam, Locks 27 and Costello Lock and Dam were still closed. Projected opening dates run from June 16 to as late as June 23.
 This graph shows the negative effect that flooding has had on barge movements on the Mississippi River moving 
through Locks 27 in Granite City Illinois. Those locks, also known as the Chain of Rocks Lock, are the last locks 
barges transit through on the Mississippi River heading to St. Louis. (Graph courtesy of the USDA's June 13 Grain Transportation Report)
Here is a link to the USACE St. Louis District reporting lock closures and other flood information: https://www.mvs.usace.army.mil/Home/Flood-Fight/
The St. Louis Harbor is closed until the river level recedes below 38 feet, which is not expected to occur until June 20, according to current forecasts. Mississippi River levels at St. Louis crested for the second time this year at 45.7 feet on June 10, 3.9 feet lower than the record level of 49.6 feet set on Aug. 1, 1993. On Sunday, June 16, the river stage was at 42.7 feet.
Here is a link to the National Weather Service hydrograph for current and future river stage forecasts at St. Louis:https://water.weather.gov/ahps2/hydrograph.php?wfo=lsx&gage=eadm7
The Lower Mississippi River remains open below St. Louis, but barge traffic continues to be disrupted by reduced tow sizes and transit time due to restrictions of daylight-only hours under some bridges between St. Louis and the Gulf. Barges are also subject to no-wake zones that also slow their transit time to the Gulf.
"The system and everything within are stressed and upside down," said Tom Russell, Russell Marine Group. "Barge logistics are totally out of balance. Empty barge availability in New Orleans is limited and costly, and ships are backing up in New Orleans waiting for cargo deliveries. Roads and bridges in flooded areas limit rail and truck movements."...MUCH MORE