Market Matters Blog

Barge freight rates for the week ending April 6 were slightly higher in the middle Mississippi and slightly lower in the St. Louis corridor as grain movement down river slowed last week. The weekly USDA Grain Transportation Report showed total grain barge movement through Lock 27 at Granite City for the week ending April 6 was lower than the previous week and down 71.8% from last year. USDA reported 182 grain barges moved down river, which is 27.2% lower than the previous week and 311 grain barges were unloaded in New Orleans, which was down 14.3% from the previous week.

Corn and wheat movement down river was lower than last week, with soybeans showing a slight increase. DTN's weekly national average soybean basis of 4 cents under the May futures as of April 9 was nearly 2 cents higher than the previous week, partially due to the lower cash price of soybeans recently. Cash soybean movement slowed in the Upper Midwest at midweek as a spring snow storm moved from Colorado through South Dakota, central Minnesota and western Wisconsin. Basis levels along the river improved slightly as exporters need to move beans south to cover previous export sales. The basis bid in the upper Mississippi in St. Paul was stronger as the first tow made its way into St. Paul, Minn., early morning on April 8, thus opening the 2013 shipping season after a nearly 3-week delay. USDA reported the average opening date in St. Paul for the last 30 years has been March 20 with last year's opening on March 17.

While the large South American harvest has put pressure on soybean and corn prices, new truck regulations in Brazil may further hamper grain exports. According to USDA, "A new Brazilian law requiring truck drivers to rest 30 minutes every four hours, with a minimum of 11 hours of rest at night, is causing delays and early morning port congestion." According to a statement by the U.S. Grains Council, "The cost of transporting a metric ton of soybeans from Mato Grosso over 4,435 miles to the port of Paranaguá has increased 506% in the past year." It is interesting to note that 70% of the Brazilian soybean crop moves by truck and, in addition to the new law, the poor road conditions in Brazil only aggravate the situation. Vessels have waited 40 to 60 days to load grain during this past harvest and adding to the transportation issues is that Brazil's port workers continue to stage short strikes with the next one scheduled for April 18 for a 24-hour period.

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