As the gut slot of harvest nears, farmers who rely on hauling their grain to a river terminal could face added costs and storage issues. Low water and construction are hampering river traffic in many areas and barge loadings may continue to be compromised if these conditions don't improve.
In early July, heavy rains overburdened the Illinois River system, the center area of the Upper Mississippi River, and the Upper Mississippi River between St Louis and Cairo. Flooding conditions existed in these three problems areas for weeks, which led to slowdowns in barge traffic and some river traffic closures. At the end of July, waters started to recede, but by then barges were behind in delivering shipments to the Gulf. River terminal corn basis dropped nearly 20 cents between the first and fifteenth of July and barge freight was either not quoted or was lower.
Fast forward to September 24 and low water is now bothering barge traffic and causing corn and soybean basis levels to weaken at affected river terminals. Tom Russell, co-owner of the Russell Marine Group told DTN via email, "Water levels on the Lower Mississippi are still relatively low but recently holding steady. A safety zone remains in effect at mile 480-490 where several groundings did occur earlier in the month. There have not been any additional groundings, but transit through this area is currently restricted to daylight only. A dredge will be on location to clear up the shoaling from Sept 23 to Oct 7. Some off-and-on closures will take place during this time period.
"Some shoaling has occurred on the Upper Mississippi between St Louis and Cairo that has required some dredging operations. Dredging operations are currently taking place at mile 48 until Sept 30. Barge traffic is allowed to transit through the area at slow speed," added Russell. "The New Orleans and Baton Rouge Harbor is also experiencing low water levels. Ocean vessel and barge traffic are moving but some shoaling is occurring alongside some terminal docks." Ceres Barge Line noted on their daily freight wire to DTN, "Drafts are being cut in St. Louis and south as river stages are working their way lower and no rain in sight." Water levels at St. Louis are at 9.3 feet and expected to drop to 4.7 feet or lower by October 8. http://goo.gl/…
Barge operators have reported shippers seem to have enough freight in front of them, but it is tough getting empties on the Illinois and Mid-Mississippi rivers. This may worsen as low water and delays due to repairs may limit the barge supply to certain areas.
LOCK REPAIRS HAMPER/STALL BARGES
Ingram Marine's website posted Sept. 24, that on the Mid/Lower Ohio, "Lock 52 main chamber was closed as of 9/14/15 and will be closed until 9/25/15 for lock and dam sill repair. While the auxiliary chamber will be available, major delays are occurring. Lock 52 auxiliary chamber will be closed for repair 10/5/15 to 10/19/15, but the main chamber will be available and delays are expected. Lock 53 is not operating, but is expected to open by Friday, September 25."
The U.S. Army Corps of Engineers (USACE) said on their website, "USACE Lock 52 and another nearby lock were built in 1929 and are scheduled to be replaced by the Olmsted Locks and Dam project in 2018, with the cost put at $3 billion. Olmsted will replace locks and dams 53 and 52 and greatly reduce tow and barge delays through the busiest stretch of river in America's inland waterways. Locks and Dams 52 and 53, in the lower portion of the river, are remnants of the original 1929 river navigation system. The highest tonnage in the nation passes through Lock and Dam 52. Locks and Dams 52 and 53 on the lower Ohio River are the last of the old wicket dams. The wickets are constructed of heavy timber about 4 feet wide and up to 20 feet long. Raising or lowering the wickets is done by a crew on a steam boiler winch barge and track hoe that moves along the upstream face of the dam." http://goo.gl/…
Martin Hettel, a senior manager with AEP River Operations, a large inland river vessel operator told the Wall Street Journal there was a bottleneck of 72 tow boats and 757 barges on September 20. Hettel said, "AEP had seven of its own tow boats waiting in the snarl, moving about 105 barges, mainly of grain." According to the USACE, both locks were expected to fully reopen by Friday, Sept. 25, but delays will continue to be an issue.
"Tows waiting to pass through Locks 52 and 53 are experiencing four- to five-day delays," Russell said, which are causing exporters at the Gulf to become concerned about loading waiting vessels in time for scheduled shipments. Basis on the Ohio River has been weaker with corn basis dropping over 20 cents so far and soybean basis over 8 cents for the week ended Sept. 25. However, both Gulf soybean and corn basis levels have been firm, hoping to entice grain to move south of the dredging and lock delays.
But the Gulf is not without its problems. Russell told DTN, "The New Orleans and Baton Rouge Harbor is also experiencing low water levels. Ocean vessel and barge traffic are moving but some shoaling is occurring alongside some terminal docks."
Mary Kennedy can be reached at Mary.email@example.com
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