21 September Mississippi Barge Rates to Challenge 2022 - Hil Anderson, Roach Ag Daily Grain Plan September 21, 2023 By John Roach General 0 A dry fall will do wonders for the pace of the harvest in the Mississippi River watershed, but it could also lead to a repeat of last year when historically low water levels snarled barge traffic and caused freight rates to soar. Water levels along the Mississippi are reportedly already low enough to force operators to carry lighter loads, which won’t make it any easier or less expensive to haul newly harvested corn and soybeans to their downriver destinations. Tuesday’s reading at St. Louis was a little over -3 feet. USDA statistics showed downbound barge rates turning sharply higher in late August and were basically doubled by the middle of September. The latest sampling pegged the acreage rate at Memphis at 817, virtually equal to the price some 800 miles to the north at Twin Cities. St. Louis rates, which were seen around 354 on Aug. 1, catapulted to nearly 721 last week. Barge rates at different locations are used to calculate the final dollar price per ton for the trip. Last fall saw rates that worked out to a record spot price for St. Louis of $106 per ton for the week of Oct. 11, according to an analysis by the University of Illinois. Drought conditions late last summer cut water levels to a record low of nearly 11 feet below normal and contributed to slower transit times and a dizzying spike in spot rates in St. Louis. Analysts said grain barge tonnage figures historically tend to be volatile in the fall. For example, rates along the Illinois River currently are lower for October than September. “Typically, barges are loaded to a 11–12-foot draft during the fall, but companies started imposing 9-foot barge draft restrictions in October (2022), which can lead to a reduction of 10,000-15,000 bushels per barge,” the Illinois report said. Heavy snowfall last winter provided a significant shot of water to the river, but the higher water levels didn’t last long, and the swift currents also stirred up the river bottom to the point that extensive dredging has been required to remove the resulting sandbars. Meanwhile, Tuesday’s weather forecast was encouraging with a “slow-moving storm system over the nation’s mid-section” late in the week that could drop up to three inches of rain in the northern Plains and upper Midwest and bring thunderstorms to the southern Plains and upper Great Lakes. The extent that the rainfall leads to higher water levels in the Mississippi remains to be seen, and there could be a lot riding on the outcome. ## Related Posts USDA’s Farm Income Report Adds Urgency to Farm Bill Talks - Hil Anderson, Roach Ag Daily Grain Plan Members of Congress will soon be making their way back to the Beltway after the latest USDA outlook for farm revenues has added some fresh urgency to negotiations over the unfinished Farm Bill. The USDA’s 2023 Farm Sector Income Forecast was released just as the nation adjourned for the Labor Day weekend. It had projected a 23% drop in net farm income this year, a dizzying decline that should increase the focus on crop insurance and other basic financial support for farmers once the House and Senate agriculture committees get back to business later this month. “Combined with weather uncertainty and a high cost of capital to operate their businesses, farmers and ranchers will be forced to adapt as they always have,” said Danny Munch, an economist with the American Farm Bureau Federation. “Part of being able to adapt means having clarity on rules that impact their businesses’ ability to operate, having access to comprehensive risk management options and being given a resounding voice during formulation of vital legislation such as the Farm Bill.” Lawmakers were on the trail in late summer ... Climate Center Extends El Niño’s Stay - Hil Anderson, Roach Ag Daily Grain Plan It looks like El Niño may be sticking around a little longer than previously expected. The monthly update from the U.S. Climate Prediction Center issued Thursday said El Niño was 95% likely to dominate winter weather from January through March 2024; the CPC last month projected the condition would run through February. The odds that “strong” El Niño conditions would dominate the Northern Hemisphere this fall bumped up from around 66% in last month’s forecast to 71% on Thursday. The CPC noted August water temperatures along the Equator increased during July both on the surface and below. “Tropical atmospheric anomalies were also consistent with El Niño,” Thursday’s report said. “Over the east-central Pacific, low-level winds were anomalously westerly, while upper-level winds were anomalously easterly.” After an unprecedented three years of La Niña conditions brought nagging drought to the Plains and California, El Niño is expected to shift the warm, dry conditions north into the upper Plains and most of the Midwest during the winter months while allowing cooler temperatures and welcome precipitation to slide into the Southwest and Texas. While no two El Niños are exactly ... Report: Ethanol May Have to Wait Longer for Sustainable Aviation Fuel - Hil Anderson, Roach Ag Daily Grain Plan Ruling The ethanol industry and the nation’s corn growers may have to wait until the end of the year, rather than later this month, to find out if the U.S. Department of Treasury will make it easier for them to qualify for tax credits and subsidies that will lead to the expanded use of ethanol to produce sustainable aviation fuel (SAF). “At issue is a requirement in last year’s Inflation Reduction Act that SAF producers seeking tax credits must demonstrate with an approved scientific model that their fuel generates 50% less greenhouse gas emissions over its lifecycle than petroleum fuel,” Reuters said. The ethanol industry has been lobbying for a scientific model that opens the door to a potentially significant role for ethanol as a feedstock for SAF in the air-transportation sector, but environmentalists argue the production of corn generates greenhouse gas emissions and that priority should be given to waste products such as used cooking oils and animal fat left over from food processing. Differences of opinion also exist over the complex tracking of emissions generated in the production process, including changes ... March 2022 USDA Quarterly Grain Stocks & Prospective Plantings USDA Stocks and plantings positive to wheat, Plantings positive to corn, negative to beans The USDA Quarterly Stocks report was not far off trade expectations for any of the crops. Corn and wheat stocks were both slightly lower, while bean stocks were slightly higher than the average trade guess. The biggest surprise came in Prospective Plantings. Farmers indicated they would plant 89.4 million acres of corn, 2.5 million acres less than traders thought. Farmers indicated 2.2 million more acres soybeans instead. After the aggressive market shakeout this week, the USDA report was released with many traders chased to the sidelines. Corn and wheat prices shot higher following the report, with July and December corn posting new life of contract highs. Bean prices initially fell following the reports but so far have held well above the low of this week’s range. Wheat prices surged higher and ended our Buy Signal in Chicago wheat. Wheat prices are still trading under the green line 20-day moving average, which is the next target for this upside move. The December corn acreage was reported 210,000 acres below ... September Quarterly Grain Stocks & Small Grains Summary Corn stocks under the smallest trade estimate. Bean stocks larger than expected. Wheat exactly as expected. Source: StoneX, Reuters The smaller than expected corn stocks drove corn prices up through the 20-day moving average, with Friday’s high (at this writing) nearly reaching the September price peak. Technical traders will view today’s performance as a positive event as well as fundamental traders that have smaller beginning stocks for the crop year. Corn prices have been in a relatively narrow trading range during the month of September and Friday’s report could give us the price thrust up to a Sell Signal. Bigger supplies of soybeans to start the new crop year prevented beans from clearing the green line 20-day moving average Friday. Beans have been in a broad trading range since early August and next week, prices will be back down challenging support and adding days to our Buy Signal. There is a gap left on the November bean chart at $13.50, which will likely be a downside target for technical traders. The just finished wheat harvest was estimated to be smaller than the ... March 2021 USDA Quarterly Grain Stocks and Prospective Plantings Farmers tell USDA, “We are not planting as many corn and bean acres as traders expected.” The quarterly stocks were slightly smaller than expected for corn and slightly larger on beans and wheat. No surprises in the Stocks report. Source: USDA, Reuters, StoneX Although corn acres are up less than 0.5%, four out of the top five states cut corn acres. Farmers decided to plant 5.4% more soybeans nationally and increased acres in each of the top five bean states. The surprise came in the wheat complex, where acreage was up 3.4% from the last estimate and a whopping 8.8% from last year. The bullishness in today’s reports is a little surprising, since acreage can certainly increase between now and the June report. By boosting the prices, traders will encourage the additional corn and bean acres the marketplace wants. How about the Buy Signals on soybeans, meal, and wheat this morning? Our strategy is to make an increment of sales on the next Sell Signal, which should be just around the corner. Source: All Slides from the USDA Executive Summary For full USDA reports, click on links below. Grain ... Comments are closed.