Market Matters Blog

This accompanying chart shows the strongest (red line) and weakest (blue line) the national average soybean basis (DTN National Soybean Index minus Chicago futures contract) has been over the last five marketing years, along with the five year average basis (purple line).

As the chart indicates, the national average soybean basis of 20 cents under the March futures (green line) is 1 cent lower than last week, but continues to move well above the five-year average of the strongest basis at this time. Even with a lower average basis recently, we have seen some end users post higher levels as farmers have disappeared from selling physical supplies due to a lower cash price. The basis along the river has been firm due to steady barge freight and also due to the recent traffic problems along the river having eased after the closure from January 27 to February 6, as well as higher water levels thanks to recent rain and snow in the Midwest.

As navigation got back to normal after the closure, barge traffic increased from the prior week when the river was closed and traffic was allowed through the affected area at a slow pace with southbound and northbound barges having to take turns. In its weekly Grain Transportation Report, USDA stated that 305 grain barges moved down river, which was 11.7% higher than the prior week and that 531 grain barges were unloaded in New Orleans which was 3.5% higher than the previous week. The USDA also reported that 562 empty barges headed up river through the locks and dams on the Mississippi, the Arkansas River and the Ohio River and was up 74 barges from the prior week.

As river levels increased due to rain and snow in parts of the Midwest and South, the U.S. Army Corps of Engineers was able to cease dredging on the Mississippi in the St. Louis-Cairo corridor on February 5. With higher water levels, draft restrictions were lifted for barges which allowed them to carry full loads for now. While the rock removal had been completed at Thebes, Ill., at the end of January, rock removal began at another trouble area on the Mississippi River at Grand Tower, Ill., which is about 90 miles south of St. Louis, but was temporarily suspended when levels rose. A news source reported that according to the St. Louis area Corps of Engineers, the work at Grand Tower is expected to make permanent improvements to the Mississippi River. The USDA also reported that, "Without additional rain, river hydrograph forecasts by the Corps indicate the river flows will sustain navigation through mid-March. On March 17, the Corps has scheduled to start navigation flow releases on the Missouri River, which could help increase water levels on the Mississippi River at St. Louis." As we head into the spring and the opening of navigation on the upper Mississippi, continued rain and snow will be key to keeping the river flowing smoothly.

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