U.S. soybean harvest is in full gear, and corn harvest is not far behind. However, water levels on the river system are becoming dangerously low, and in some cases, have temporarily stopped barges from moving.
One would think that with heavy rains coming from both Harvey and Irma that flooded major cities and towns, the Mississippi River and its tributaries should have plenty of water. There's only one problem: Those historical rains never reached the major rivers to affect water levels.
"During the last month, conditions unexpectedly turned dry through most of the U.S. The only location that experienced significant rain activity was the Deep South due to passing tropical storms," said Tom Russell of the Russell Marine Group.
DTN Senior Ag Meteorologist Bryce Anderson noted that the first week of October may be a wet period over much of the Western Corn Belt. "The U.S. forecast model during both Thursday, Sept. 28, and Friday, Sept. 29, has been featuring a swath of rain totaling from 1 to 3 inches from north-central Kansas northeast to central Minnesota. The area with heavy rain includes much of eastern Nebraska, northwestern Iowa, eastern South Dakota, and southwestern Minnesota."
Here is the good news/bad news, according to Anderson: "There are several angles to this forecast that are worth noting. First, as my colleague Mike Palmerino pointed out in discussion Friday, there is not a universal forecast model call for this heavy rain. The European forecast model has probably about half the rain forecast that the U.S. model does. The Euro model is somewhat of an outlier, however, as the Canadian forecast model presentation agrees with the U.S. model. Nonetheless, there is some question about whether this rain prospect will actually verify."
Even if this rain does materialize, "the entire (river) system does need ongoing rain to recharge," said Russell. "The river stage on the Lower Miss is expected to continue to fall throughout October. By the end of October, without rain, the water levels on the Lower Miss will be at very low levels but not yet reaching historically low levels."
Currently, the biggest problem areas are Lock 52-53 on the lower end of the Ohio River and middle sections of the LMR (lower Mississippi River) around Memphis and nearby areas. Low water in these areas is causing delays up to five days. Russell noted that as of late in the day Sept. 28, locks 52-53 had a backlog of about 60 boats with tows waiting for passage.
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That area on the Ohio River has been troublesome for weeks as lock repairs and now low water has been and continues to cause excessive delays. As for the Mississippi River, the level at Vicksburg is 6.7 feet above zero gauge and falling, according to the National Weather Service. At Memphis, levels as of Oct. 2 were 6.41 feet below zero gauge and falling, according to NWS. (https://goo.gl/…)
Russell said that, "Tows on the Lower Miss have been reduced by five barges. Some barge terminals and fleets on the Lower Miss are having trouble moving barges due to the quickly falling river. There is heavy congestion in all areas due to harvest and low water. Also, rock pinnacle removal is taking place between St Louis and Cairo. The river is open during rock operations, but delays of one to two days are being experienced." A rock pinnacle is a formation in the river that becomes hazardous in low-water conditions, and dredges have to scoop out the rocks and then blast them into small pieces.
On top of all of this, more lock repairs are scheduled to begin at key locks on the Illinois River through the middle of October, according to Ingram Marine Group. "Closures will be 0600 HRS to 1800 HRS each day and includes the following locks: Brandon Road, Marseilles, and Peoria Locks. During those periods, there will be intermittent river closures and delays."
RIVER BASIS TAKING A HIT
Just as soybean harvest ramps up and corn harvest is not far behind, the basis along the river has been falling apart thanks to the poor conditions on the river. Adding to the fall in basis is higher barge freight costs, which have jumped up due to the harvest demand for barges and the problems getting them to shippers.
Spot barge rates have jumped up nearly 400% in the past week as shippers push to get freight to their stations to be prepared for harvest. To give you an example, barge freight in early September in the Twin Cities was about $23.21 per ton, and St. Louis was $8.78 per ton. On Friday, barge freight in the Twin Cities for the first week of October was $46.25 per ton, and St. Louis was $29.92 per ton. These extra costs are eventually passed down to the shipper, weakening basis.
However, it is interesting that CIF Gulf basis for both corn and soybeans rose throughout the last week of September as vessels continue to arrive at the Gulf to load new-crop contract commitments.
Russell said that, in the New Orleans and Baton Rouge Harbors, "water levels are low in the Harbor but not at critically low levels. Barge and ocean vessel traffic is moving normally, for the most part. Some grain terminals and fleets are experiencing slowdowns shifting barges due to low water."
On Oct. 1, the Mississippi River at Baton Rouge was at 7.7 feet above zero gauge and falling.
There are also reports of bids for barges "afloat," meaning a loaded barge that is ready to move or is already heading south, and the closer to the Gulf the better.
Shippers have also been loading more rail cars for delivery to the Gulf. The USDA weekly Grain Transportation report noted that, "With the delays on the waterways, weekly railcar deliveries to the Mississippi Gulf for the week ending Sept. 20 were up 148% compared to the previous week."
As we head into October, aka harvest month, it is looking like we may not get much relief from low water, low basis and high barge freight. This comment from social media pretty much sums it up: "It may get worse before it gets better... and it's worse."
Mary Kennedy can be reached at email@example.com
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