Market Matters Blog
Mary Kennedy DTN Basis Analyst

Thursday 09/20/12

River Woes, Basis Moves

The U.S. Army Corps of Engineers reopened Lock 27 at Granite City, Ill., early Thursday morning after it was closed last Saturday for emergency repairs. As of late Wednesday, there were reports of 63 vessels and 455 barges that were stuck on either side of the crippled lock and dam. Lock and Dam 27 is a key to navigation on the Mississippi because all traffic moving North and South must pass through it. The Coast Guard is organizing the movement of traffic and reported that it had already moved 6 vessels and 80 barges through the lock, but said that it could be 3-4 days before the traffic jam is cleared.

The corn and soybean basis will be affected by this because of the time it will take the loaded grain barges to get to their destinations and then head back empty. After Hurricane Isaac forced the close of river traffic right after grounded barges blocked traffic a week prior, we saw the soybean basis drop 47 cents during that timeframe. Barge freight rose because demand for empty barges along the river was high due to the early harvest in the south. With the harvest now farther north, river terminals will want to move soybeans and corn south. There were reports late Wednesday that both the soybean and corn basis levels at the Gulf were bid 5-10 cents higher for September through early December movement.

Posted at 10:22AM CDT 09/20/12 by Mary Kennedy
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