Market Matters Blog

Corn, Wheat Shipments to Gulf Rise While River Levels Fall

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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(USDA chart)

Corn and wheat shipments to the Gulf increased last week as exporters pushed to load for nearby commitments. A need for spot corn was seen in strong corn basis levels this past week as CIF NOLA values rose to a high of 120cn for loaded barges on the water. Spot basis levels in the Illinois corridor were higher, as well. There were reports that new export corn business had been done late last week, ahead of the Argentine farmer strike, which would stop corn movement to their major port and hold up vessels for lack of supply. There were reports on Monday that only 553 grain trucks entered the port vs. 3,561 the prior Monday. The demand for barges caused freight in the Illinois corridor to move higher for spot placement.

HRW wheat values were strong as Gulf exporters pushed to get vessels loaded and bound for Brazil before August 1. Brazil temporarily suspended their 10% import tariff on April 1 to entice imports when milling supplies of wheat became tight. Since the tariff will be back in force as of August 1, vessels need to make it to Brazil before then to avoid additional costs. With a delay in U.S. winter wheat harvest, competition for milling quality HRW wheat has increased as demand from millers and exporters intensified recently. The DTN average HRW wheat basis is 21 cents higher for the third week of June vs. the same time last year.

USDA's weekly Grain Transportation report noted for the week ended June 15, grain movements by barge totaled 378,268 tons. This was 158% higher than the prior week but 32% lower than the same time last year. During that same week, 243 grain barges moved down river, 153% more than the prior week. A total of 474 empty barges moved upriver through Mississippi River Locks 27, Arkansas River Lock and Dam 1 and Ohio River Locks and Dam 52, which was up 22 barges from the previous week. This increase in movement is due to all locks and dams being open for business as flood waters began to recede. The Mississippi River at St. Louis at mid-morning Thursday is at 28.99 feet vs. the 29.05 feet 3 1/2 hours prior, with predictions that it will continue to drop based on current weather forecasts.

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