Market Matters Blog

Year-to-date wheat inspections for the week ending May 23 were 11% higher than this time last year, year-to-date corn exports were down 57% and soybean inspections were 16% lower. Some of the wheat increase was seen in the total number of hard red winter wheat exports from all Gulf points. The HRW wheat basis is 19 cents higher than the five-year average for week 5 in May. Mill demand has also been strong as competition has emerged from the feed sector once again, along with concern that the new crop may be of poor quality in many spots. Conditions in some of the key states declined as heavy rainfall and damaging wind and hail moved through the Plains late last week. Even with all the rain in the Plains, drought conditions still exist in eastern Colorado, western Kansas and the Texas Panhandle where crops continue to deteriorate from lack of moisture. USDA reported development of the crop is behind with 60% of the crop headed vs. the five year average of 72%. Texas has started harvesting and is 12% done as of May 26 vs. 2% last week, but is behind last year's pace of 55% at the same time. The later-than-normal winter wheat harvest could delay the seasonal increase demands for transportation normally seen at harvest time.

While levels on the Mississippi River were just beginning to decline last week, heavy rains over the weekend caused levels to rise once again on portions of the Upper Mississippi, Illinois, and Missouri rivers. USDA's weekly Grain Transportation Report stated the U.S Coast Guard may stop traffic at St. Louis if levels reach 38 feet once again. The water in St. Louis was at 28 feet on May 30 and is continuing to rise. Current predictions from the National Weather Service expect the crest to come on June 4 at 6 feet above the 30-foot flood stage. High water restrictions have already been imposed in and around the St. Louis area. On May 29, the U.S. Army Corps of Engineers stated in a news release they were closing Lock 20 and 21 and closing Lock 22 on May 30 because high water "overtops lock gates making the locks inoperable." That closure will halt barge traffic from Canton. Mo., to New London, Mo., which will impede traffic in the Upper Mississippi River corridor. The Corps also reduced releases from Gavins Point Dam near Yankton, S.D., on the Missouri River. The intent of slowing water from the dam is to alleviate flooding and also to prepare for the possibility of more severe weather. USDA reported the Norfolk Southern railroad has closed its main line tracks and bridge at Hannibal, Mo., because of rising water and rerouted shipments will be delayed 24 hours.

Barge grain movements during the week ending May 25 totaled 424,762 tons, which was 10.7% higher than the previous week but 15% lower than the same period last year. During that week, 382 grain barges were unloaded in New Orleans, which was up 1.% from the prior week. There were 517 barges that moved upriver, which was up 95 barges from the prior week, but 11.8% lower than the three-year average. Barge freight on the Illinois River for the week ending May 28 was up 13% from last week, but down 6% from last year at this time and down 18% from the three-year average. Many shippers in that area continued to load May grain commitments to the Gulf after falling behind early in the month due to high water problems. USDA reported rail loadings fell for the second week and for the four weeks ending May 18, were down 1% from last week and down 19% from last year at this time. Grain movement has been slow as farmers continue to plant their spring crops.

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