Market Matters Blog

River Levels Remain Low; Corn Barges Continue To Move Upriver

By Mary Kennedy , DTN Basis Analyst
(Chart courtesy USDA)

During the five weeks from August 4 to September 7, 375 barges headed upriver through Mississippi Locks 27, 94 barges more than the prior week, carrying 196,000 tons of corn, according to USDA's weekly Grain Transportation Report. Most of that total came from the week ending September 7 with 113,300 tons of up-bound corn reported at Locks 27. That amount was 24% higher than the amount of up-bound corn during the same timeframe in August through September of 2012. New-crop corn started moving upriver as soon as the southern harvest began supplying end users who were running out of corn for daily grind needs. According to USDA, the majority of the up-bound corn was reported at Mississippi River Locks 15, 25, 26, Illinois River Lock and Dam 8 and Ohio River Locks and Dam 52. A recent drop in corn basis and an early harvest in parts of the Midwest may slow this movement, but more than likely it will continue through most of this month. Barge freight has increased and water levels remain low, causing many barge lines to lower drafts, meaning less product can be loaded into the barge, creating higher costs to move the corn. Barge freight rates in the Illinois corridor were up 7% for the week ending September 10 with similar freight increases seen in many of the other corridors. The Mississippi River at St. Louis was at 0.18 feet above zero gauge Friday morning and while it is expected to inch above zero near the middle of next week, predictions for the following week show it dropping to -0.2 feet.

Update On PNW Grain Inspectors Work Stoppage

Washington State Grain Inspectors have returned to work at United Grain Corp in Vancouver after refusing to enter the terminal because picketing by longshoremen at the designated entry gate had made them feel unsafe. After inspectors were turned down for entry to the main gate at the Port Of Kalama due to legal and safety issues, there was concern that vessels at the terminal would not get loaded if they were unable to be inspected. The work stoppage also created speculation that Federal Grain Inspection Service may have to be called in to help so that grain exports from UGC would not be affected. According to news reports, officials at the Washington State Ag Department have asked Vancouver police to send an officer to the east gate of the port to insure safe entry for the grain inspectors. However, this solution is temporary while the State Ag Department continues to work on a formal plan for the inspectors' safe entry into UGC, which will also give inspectors a contingent plan if an officer is unable to be at the port during this time. The current arrangement has allowed the state inspectors to enter UGC without incident and news reports stated the grain inspectors have resumed their regular shifts at the terminal.


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Freeport IL 9/13/2013 | 1:36 PM CDT
Some are expecting feed and residual use of grains will be lower this last quarter (ended September 1, 2013) when compared to a year ago. This is projected mainly upon a lower number of cattle on feed. USDA's August 23, 2013 released of the number as of August 1, 2013 shows a 6% drop from the prior year. Our very simple model (does not factor in all variables so subject to error) indicates lower feed use by cattle may only decline around 1% in the June through August quarter of this year. This projection comes from an increased average weight of the cattle on feed. Simply put, heavier cattle consume more feed. When comparing USDA's grain consuming animal feed units, between this year and last, and backing out cattle on feed, one finds an increase of 2%. So the potential is there for other classes of livestock to consume more grain. All this does not mean much for corn with a large carryout projected for the 2013-14 marketing year and little room to adjust the beginning balance down. It could push wheat's ending stock to use levels under 20%; a level not seen sense the 2007-08 wheat marketing year. An upward wheat price move, if it happens at all, will be dependent on this fall's planting and World supplies. A September 1, 2013 wheat stocks number less than 2 billion bushels might get the trade thinking. Freeport, IL