Market Matters Blog

National average soybean basis of 51 cents over the July futures is 1 cent higher than last week and continues to move well above the five-year average of the strongest basis at this time. Soybean basis has continued to rise and is 82 cents higher than the DTN five-year average basis for the third week of May. Most U.S. basis levels have been positive since April and continue to climb as tight old-crop supplies remain a concern for crushers. Basis along the river was stronger last week with April barge placements completed and end users needing to buy spot supplies after flooding kept them from unloading grain onto barges.

While flood waters have receded in most main river corridors, barge traffic along the Illinois River remains slow due to speed and wake restrictions after weekend rain kept water levels high. While the Marseilles Lock and Dam reopened on the northern Illinois River May 14, restrictions remain in place as repairs continue on the gates and sunken barges are being removed. There is also high water in the lower corridor of the Mississippi River with a crest predicted for the New Orleans area by May 21. USDA reported that the Coast Guard issued restrictions to barge traffic on the lower Mississippi River, including slower speeds, no wake zones and areas near bridges were faced with nighttime restrictions as well.

Barge freight has also been lower with river conditions still hampering barge traffic along with slow demand in the Gulf. Barge freight in the upper Mississippi was down 17% from this time last year and in the middle Mississippi freight was down 21% from this time last year. The Illinois River barge freight for the week ending May 14 was down 3% from the prior week, down 19% from this time last year and 26% lower than the three-year average. USDA reported that soybean inspections for the week ending May 11 were down 44% from the previous week and were the lowest inspections reported since January 1, 2010. Barge grain movements during that week totaled 314,948 tons, which was 32% lower than the previous week and 41% lower than the same period last year. The total of grain barges moving down river was 30% lower than the previous week and the number of barges unloading in New Orleans was down 13.7% from the prior week.

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