Lower Mississippi River levels in Baton Rouge and New Orleans rose slightly last week and barge traffic was still able to move in those areas without any problems. USDA's Grain Transportation Report for the week ended January 11 stated 749 barges unloaded in New Orleans, which was up 8% from the prior week. For the week ended January 9, 45 ocean-going grain vessels were loaded in the Gulf, with 80 vessels expected to be loaded in the next 10 days. With continued demand for soybean exports, business at the Gulf has been brisk and soybean basis levels for export have been strong.
However, in the Upper Mississippi and Illinois rivers, barge traffic has been stalled at times and has slowed as they plow through ice-laden waters. Last week, barges had to dodge ice chunks on the Mississippi, Illinois and Ohio rivers. Repairs to the LaGrange lock and dam on the Illinois River are not yet complete after a tow broke the gate. Barge lines reported on January 16 that the wickets went down today and the replacement gate is expected to go in by tomorrow. USACE stated, "LaGrange uses a Chanoine wicket dam, the navigable pass type. The wicket section is 436-feet long containing 109 wickets. Each wicket is 3.75 feet wide by 14.92 feet high, with a .25-foot gap between wickets. LaGrange is one of only two wicket dams on the Illinois Waterway."
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Barge freight costs have been mostly higher in St. Louis since December as water levels have fluctuated, causing restrictions. Ice chunks caused groundings, which slowed movement in that area until grounded barges were refloated. USDA reported in their 2013 Review of Grain Barge Shipments: "Rates for St. Louis to the Mississippi Gulf were 461% of tariff, or $18.39 per ton for December, 11.6% higher than the 3-year average." They also reported rates for the 4th quarter of 2013 were at above-average levels with the large U.S. harvest; adding to that was increased demand at the Gulf. The current freight reported for St. Louis as of January 16 is 25% to 40% higher than the prior day, as demand for barges in that area continues to increase due to the lack of barges coming from the Illinois River since the LaGrange accident on January 10.
However, barge freight costs did not move as high as rail car costs in the secondary freight market. Shippers in the Northern Plains continue to see the costs for shuttle trains at historic levels due to logistic problems that have been occurring for the past two months. Slower turn times for shuttles due to the increase in oil cars moving by rail have caused secondary freight to skyrocket. Basis for soybeans delivered by rail to the PNW continues to inch higher nearly every day as shuttles turns are down to two per month versus the usual three turns per month. However, country elevators are beginning to see more shuttles placed for loading after waiting weeks to see placements. USDA reported for the week of January 9, the average shuttle secondary railcar bids/offers per car for January were at $2,000 above tariff. This was $321.00 higher than the previous week and $2,063 higher than last year. There were no bids/offers for non-shuttle freight as the railroad is concentrating on placing shuttles to catch up.
Poor weather in the Northern Plains continues to add to logistic woes as high winds, cold temperatures and blowing snow have stalled car loadings and train movements. Last Friday, the BNSF issued wind advisories for traffic in Minnesota, Montana, and North and South Dakota. According to the BNSF website, expected gusts of up to 100 miles per hour over the weekend of January 11-12 would either slow trains or stop them until conditions improved, further delaying grain movement. A shipper in Montana reported they ceased loading cars because the wind was blowing the tops open and grain was blowing out. On January 16, a blizzard in eastern North Dakota and western Minnesota virtually stopped all traffic, rail and truck, as blowing snow created dangerous conditions. The continued delay in grain movement has pushed spot and PNW milling quality spring wheat levels higher. As of the close on January 16, 14% protein spring wheat basis on the Minneapolis spot market was bid at $4.00 and traded at $4.25 above the Minneapolis March futures. While there were no 15% proteins to test the market, the last trade prior to Jan. 16 was at $4.15 to $4.25 above the MWH. Besides the lack of car movement pushing basis levels higher, a lower protein spring wheat harvest last fall caused buyers to pay more for higher protein wheat to blend for milling and export requirements.
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