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Cash Market Moves             09/26 11:05

   Low Mississippi River Levels Could Spell Trouble for Harvest

   Water levels in the Lower Mississippi River have been falling for months and 
relief may not be in sight.

Mary Kennedy
DTN Basis Analyst

   Water levels on the Lower Mississippi River (LMR) are dangerously low in 
some areas and may slow or even stop barge traffic just as corn and soybean 
harvest starts. Most of the fall export business is for soybeans at the U.S. 
Gulf and the persisting low water can be problematic for shippers who need to 
move the new-crop harvest down river.

   The USDA noted in their weekly Grain Transportation Report for the week 
ended Sept. 17, barged grain movements totaled 209,600 tons. This was 16% more 
than the previous week, and 130 grain barges moved down river, which was 25 
fewer barges than the prior week. Some of the slowdown can be attributed to a 
late start to the southern harvest and slow movement down the LMR.

   Demand at the Gulf has been bid triple digits for spot top quality soybeans 
barges all month, with guaranteed arrival dates at the Gulf. As of Sept. 23, 
the barge market was still inverted with the balance of Sept. bid at +170X. The 
first-half October was bid +145X and the last half was bid 134X. And, given the 
reduced barge drafts and the surging barge freight values as harvest picks up, 
those basis values are strong for this time of year.

   A normal draft -- the distance between the waterline and the deepest point 
of the boat -- for a barge when river conditions are good is about 12 feet at 
1,500 tons. On the Illinois, barges are regularly loaded to about a 9-foot 
draft at 900 tons. Each foot of draft that is reduced means a barge's cargo is 
cut by 200 tons and will cost shippers money as they are paying the same amount 
of freight to ship less. In addition, that will create the need for more barges 
to pick up the slack.

   American Commercial Barge Lines reported Sept. 23 that draft reductions have 
been implemented from Cairo, Illinois, to Greenville, Mississippi, at 10'6" max 
and Greenville to the Gulf at 11'0" max. Northbound drafts have been reduced to 
9'6". "Hearing docks may see further loading draft restrictions locally, some 
reportedly at 7' max. Tow size has been cut back resulting in a 12% to 15% 
reduction in tow size."

   According to ACBL, groundings have been driving intermittent closures of 12 
to 36 hours over the past two weeks. "U.S. Army Corps of Engineers is engaging 
additional buoy boats to improve navigational aids as well as two dredges. 
Expect these issues to continue well into October based on forecasted 
precipitation. Industry is holding off U.S. Coast Guard request for further 
draft and tow-size restrictions."

   "Overall, the forecast leans dry for the entire area east of the Rockies 
until we get to December," said DTN Ag Meteorologist John Baranick. "Of course, 
we'll get some events in that time frame where some heavier rains will occur, 
but the prospect for widespread heavy rain across the basin that would raise 
river levels is rather low and probably depends on whether or not a tropical 
storm or hurricane moves through any of the basins."

   So far, the U.S. has ducked those tropical systems, but Baranick said he's 
keeping a close eye on the tropics. "Tropical systems bring lots of heavy rain 
in a short period of time and if they penetrate deep enough into the country, 
can raise rivers quickly. Hurricane Ian is going to stay over the Southeast and 
MidAtlantic later this week and will have no impact on the major river systems. 
But we're still in peak hurricane season for another few weeks and a direct hit 
could change the landscape."

   Baranick added, "During the wintertime, if we do end up with better 
precipitation, it takes quite a while to get it into the main rivers like the 
Ohio, Missouri, and Mississippi. And by that time, soils in northern areas are 
freezing up and locking away any moisture they have, storing it on top in the 
snowpack or ground ice. It may take until next spring's melt to get the rivers 
back up again in any significant way."

   Remember the recent talk about piping water from the Mississippi River to 
the drought-stricken West? The Bureau of Reclamation did a thorough study of 
the idea of pumping Mississippi River water to Arizona in 2012, concluding that 
the project would cost $14 billion (in 2012 dollars) and take 30 years to 
complete.

   Besides the cost, counting on the Mississippi River to help out in years 
like right now would be impossible given we currently don't have enough water 
in some parts of the river to keep our fall harvest bushels safely moving 
downriver.

   Here are links to some of the lowest spots on the LMR and tributaries that 
meet up with the Mississippi River.

   St. Louis, Missouri: 
https://water.weather.gov/ahps2/hydrograph.php?gage=eadm7&wfo=lsx

   Vicksburg, Mississippi:

   https://water.weather.gov/ahps2/hydrograph.php?gage=vckm6&wfo=jan

   Cairo, Illinois:

   https://water.weather.gov/ahps2/hydrograph.php?gage=ciri2&wfo=pah

   New Orleans, Louisiana:

   https://water.weather.gov/ahps2/hydrograph.php?gage=norl1&wfo=lix

   Mary Kennedy can be reached at Mary.Kennedy@dtn.com

   Follow her on Twitter @MaryCKenn




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