Market Matters Blog
Mary Kennedy DTN Basis Analyst

Thursday 10/25/12

Barge Movement Increases Along With Freight

Barge movement increased during the week ending Oct. 20, according to USDA's weekly transportation report, for a total tonnage of 755,800 tons. Tonnage was 32% higher than the previous week and 11% higher than the same week last year. USDA reported that soybeans were 71% of that tonnage compared to the 5-year average in which soybeans represented only 15% of the tonnage in this quarter. As seen in the accompanying graph, which shows the 3-year average barge movement through Lock 27, corn represented 76% of the barge tonnage during this quarter. However, lower corn exports at the Gulf this year and high sales of soybeans to China caused corn shipments to lag behind this fall.

(Graph courtesy USDA)

USDA also reported that during the week ending October 20, 482 grain barges moved down the river which wasup 26% from last week with 814 grain barges unloading in the Gulf Port, up 14% from last week. Although the Mississippi River is still dangerously low in certain areas and draft restrictions still apply, the increase in barge movement could be attributed to the fact that during the week ending October 20 there were no serious stoppages along the river, which allowed traffic to move at a steady, but still slow, pace.

Because of the increased soybean movement due to high yields from the upper Midwest harvest, barge freight increases were the highest in the St. Paul/Savage corridor, which was up 100% from the previous week and also in the MTCT corridor (Memphis Through Cairo Terms: barge freight on cargo originating on this stretch of the Mississippi River) which was 125% higher than last week. Even though these increases caused barge freight to weaken along the river, the DTN National Average soybean basis was actually unchanged from the prior week. This is due to soybean processing plants keeping their bids firm to entice the farmer to bring his product to market given that the cash price for soybeans has declined in recent weeks.

Posted at 3:22PM CDT 10/25/12 by Mary Kennedy
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