Market Matters Blog

It is hard to imagine that less than 4 months ago there was talk of the Mississippi River closing due to low water. As of this past weekend, a closure did indeed come, but it was due to too much water as heavy rains moved through the upper Midwest with rain totals in some areas up to 6 inches.

This past Sunday, the U.S. Coast reported a string of 114 barges broke loose from the Port of St Louis with 11 barges sinking, causing a shutdown of the river. The Associated Press reported that as of Sunday, the river was at or near crest between the Quad Cities and near St. Louis with more rain in the forecast.

The flooding on the Upper Mississippi and Illinois rivers has caused closures at the locks and dams in those areas, possibly through the end of the month. Most of the affected rivers are expected to crest Thursday or Friday, with record levels predicted on the Illinois River.

A safety zone is still in effect on the Illinois River until April 30 between Locks 43 through 253. Traffic cannot enter safety zones without permission from the Captain of the Port or the Coast Guard. The Mississippi at Vicksburg was reopened on Tuesday, but barge traffic is slow at St. Louis due to the high water and there are still lock closures in the Upper Mississippi at Locks 16 through 18 and 20 through 25.

River soybean and corn basis levels have been mixed this past week due to the closures and then the reopening of some of the busy areas, especially in St. Louis where soybean basis levels strengthened at midweek. In the Illinois corridor, basis levels are the weakest with barges sidelined until the water recedes.

Barge freight along the river from St. Paul through to the Ohio corridor was not quoted due to the river closures early in the week and as of Wednesday, freight was still not quoted in the areas on the Mississippi that are still closed as well as no quotes in the Illinois corridor as seen on the attached graph.

Prior to the heavy rains causing high water issues on the river, barge freight remained steady as corn and soybean exports slowed to the Gulf. In USDA's weekly Grain Transportation Report for the week ending April 20, total grain moved on the river was 237,799 tons, 29.6% lower than the previous week and 65.4% lower than the same time last year. One-hundred-seventy-eight grain barges moved down river that week, 17.6% lower than the week before. Barge movement through Locks 27 at Granite City, Ill., was down 78.2% from last year and 68.6% lower than the 5-year average. However, grain barges unloading in New Orleans gulf totaled 378, which was up 15.6% from last week.

USDA reported that 2013 first quarter grain inspections at all Gulf ports of 12.5 million metric tons were 20% lower than last year and 34% lower than the 5-year average. Even though rail deliveries to port were up 30% in the first quarter, that increase was not enough to replace the drop in barge grain shipments due to lower export demand and low water issues on the Mississippi. For the first quarter, barge grain movements through Locks 27 were down 37%. As a reminder, Locks 27 are used to gauge main river traffic movement, because these locks move more cargo than any other area on the Mississippi River as they are the main locks south of where the Missouri and Mississippi rivers meet.

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