When the Levee BreaksTags: corn, Global Grain, logistics, Soybeans, us gulf coast, weather, wheat
Heavy rainfall and above-normal snowfall accumulation across the US have escalated flood risk over the short and medium-term. The flood stage has already been surpassed at the Mississippi River in St. Louis, with water levels now exceeding 30 feet. Through mid-June, the upper half of the Mississippi River could face additional flood risk as snowpack melts. The National Weather Service has warned of “Above to Much Above Normal Flood Risk across southern Minnesota, Wisconsin, Iowa, Illinois, Missouri and extending down the Mississippi River through mid-June.”
Logistics have become an issue with high water resulting in reduced tow size of 10 to 15 barges on the Lower Mississippi and three areas of “daylight only operations.” High-water regulations in the Gulf of Mexico are estimated to be in place into April. It is difficult to estimate exactly how much these weather issues have negatively impacted corn and soybean loadings, but it seems fair to say that weather has played a role. The number of grain barges unloaded in the New Orleans port region sank to 466 as of March 16, down from 486 in the week prior and down from a 2019 peak of 865. Unloads were also down 18 percent versus the same period last year.
Countervailing this weak trend in barge unloads is a pickup in vessel loading in the US Gulf and Pacific Northwest port region. As of March 7, some 47 boats were loaded in the US Gulf and 28 were loaded in the Pacific Northwest. US Gulf loadings were up from the week prior but down from 54 for the same period a year ago. Pacific Northwest loadings were steady versus both respective time periods.
ClipperData shows combined corn, soybean and wheat dry bulk loadings year-to-date have totaled just 19 million tonnes, down from 23 million tonnes for the same period last year and 27 million tonnes in 2017. Flooding, compounded by ongoing Avian Influenza and trade war issues with China, will continue to put pressure on the US export outlook in the near-term.
About The Author
Ken Smithmier is our Director of Market Research – Agricultural Markets. He brings to ClipperData 12 years of experience in the agricultural commodity markets, including prior roles at Archer Daniels Midland, Chicago-based The Hightower Report, and at a $2.5 billion global food services company, where he oversaw commodity risk. Ken has extensive experience in both physical and financial agricultural commodity trading. His primary responsibilities are analyzing global trends in the agricultural markets and delivering high level research to clients in the space.