Market Matters Blog

Corn basis levels were strong for the week as river terminals needed spot supplies while they continued to catch up on shipments to the Gulf after barges were stalled due to high water and treacherous conditions on various sections of the rivers prior to last week. Conditions on the rivers improved last week as the Upper Mississippi, Illinois and Lower Ohio Rivers saw falling water levels after reaching a crest late in the week. On the upper Illinois River, Marseilles Lock reopened on May 15 with the Coast Guard imposing restrictions for barge traffic as repairs continue on the gates. The Mississippi River was expected to crest in St. Louis Wednesday with the lower Mississippi expecting to crest by the weekend. USDA reported total corn inspections through the week ending May 16 were up 17% from the prior week, but nearly 50% below the total last year at this time.

Total grain tonnage moved on barges during the week ended May 18 was 383,719 tons, according to USDA's weekly Grain Transportation report, 22% percent higher than the previous week but 40% lower than the same period last year. The total number of grain barges moving down river was 41% higher than the previous week and the number of barges unloading in New Orleans was up 86% from the prior week. Barge freight has been steady to slightly lower and for the week ended May 21, freight in the Illinois corridor was down 2% from the prior week, down 15% from last year and 28% lower than the three-year average.

Grain movement to the Gulf for the past four weeks has been slow overall and USDA reported that during the four weeks prior to May 16 an average of 23 grain vessels were loaded per week at the U.S. Gulf compared to 33 per week during the same four-week timeframe in 2012. Grain movement on land was slow as well and USDA reported that for the first time since 1995, when records began, carloads of grain originating on U.S. railroads fell below 16,000, the four-week average for the week ended May 11 each year. Weekly carloads of grain for the week ended May 11 were 15,555 cars, down 8% from the prior week, 22% from last year, and 25% from the 3-year average. Late spring snowstorms causing treacherous conditions in the Upper Midwest, high water due to flooding closing portions of the river system temporarily as well as some railroad sections near Illinois and increased end-user demand on the interior and less demand for export all played a part in the slowdown of grain cars and vessel loadings at the Gulf.

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