Market Matters Blog

This attached chart shows the strongest (red line) and weakest (blue line) the national average soybean basis (DTN National Soybean Index - Chicago futures contract) has been over the last five marketing years along with the five year average basis (purple line). As the chart indicates, the national average soybean basis of -30 cents under the January futures (green line) is up 2 cents from last week and is still above the five year average of the strongest basis at this time as basis levels in the St. Louis corridor rose as shippers push to keep barges moving along this very important stretch of the river. According to the latest prediction by the National Weather Service, the levels in St. Louis are expected to drop to 9 feet by the end of December and possibly to 8.5 feet by the middle of January.

Barge freight was higher to end the week as shippers began to look for nearby freight after standing on the sidelines the prior week due to concern that the river could close by the second week of December. Lack of barge movement could be seen during that time as the USDA reported that during the week ending December 8, 517 grain barges moved down river, which was down 12.8 percent from last week. Good rains in the Ohio River valley improved water levels enough to send shippers back to loading barges.

Navigation on the river was still slow as the drafts have been lowered in the areas of the river not replenished by rain and along the river near Thebes, Ill., where dangerous rock formations exist. According to the USDA Thursday in their weekly transportation report, the U.S. Army Corps of Engineers has awarded initial contracts for rock removal at key locations near Thebes. "The initial contract will remove the most dangerous rocks that may cause a potential closure of the river. The Corps reports that the first phase will start as soon as December 17 and could take 60 days. The two companies awarded the contract will perform work at the site 16 hours a day, and allow traffic to pass 8 hours a day."