Market Matters Blog

Recent flooding had caused lock and dam closures on the Mississippi River due to high water and barge accidents, but by early this week, those areas reopened to traffic. High water had closed an area between McGregor and Davenport, stopping barges from reaching the upper Mississippi corridor loaded with fertilizer and stopping grain barges from heading downriver to the Gulf. After reopening on Tuesday, corn and soybean basis levels showed improvement in the upper Mississippi area. The Illinois River has remained closed since the weekend of April 19 when flood waters rose in Marseilles with reports of seven barges slamming into the Marseille Lock and Dam after breaking loose from their tow. The Army Corps of Engineers determined that the dam was safe, but that five of the eight gates at the lock were damaged.

The Marseilles area on the Illinois River remains closed indefinitely, with the corridor below Marseilles reopening Wednesday, increasing soybean basis levels in that area as barges were able to move again. That lower Illinois River corridor had been closed because, according to the USDA Grain Transportation Report on Thursday, waves produced by moving barges were causing damage to the levees. When the area reopened, there were restrictions in place for barges to move at low speeds with "no wake zones" in place, and tows are required to extend separation distances from other tows. However, with 2 to 3 inches of rain forecast for central Illinois through Saturday, river levels may be compromised again, causing another slowdown in barge traffic. The attached map shows the location of Marseilles, Ill., and the cities below located on the lower Illinois River.

With the flooding along both the Mississippi River and the Illinois River either halting or slowing down barge movement, it should come as no surprise that traffic on the river was lower last week compared to the prior week. USDA reported that during the week ending April 27, only 76 grain barges moved down river, which was down 57.3% from the prior week, and that 278 barges unloaded in New Orleans, down 26.5% from the previous week. Total tonnage of barge grain movements was reported to be 118,000 tons, which was down 83% from the previous week and 81% lower than the same time one year ago. The barge freight rates as compared to last week were steady, with rates still unquoted in the Illinois corridor. However, a barge company reported that high water rates went into effect last Monday. With speed slowdowns and more dangerous conditions facing tows, those companies will increase rates in zones where high water is a problem.