Ice buildup hampered commercial grain barge traffic on the mid-Mississippi and Illinois rivers this week, and frigid weather in the forecast will further restrict grain and soybean shipping next week, industry sources said on Friday. Locks were clogging with ice on the rivers, both critical waterways for shipping corn and soybeans from Midwest farms to export terminals at the US Gulf Coast, and navigation was restricted by surface ice buildup, the sources said.
Grain shippers were still recovering from this week's severe winter storm which brought heavy snow and, in some cases, freezing rain to the Midwest and drastically reduced barge loading and movement in many areas, they said. "The ice has made it really tough to execute (grain loadings) and the lack of traffic for a few days has made it difficult from a river perspective," a barge broker said.
Low temperatures in the eastern Midwest were expected to drop to minus 5 to minus 15 degrees Fahrenheit (minus 20-25 Celsius) next Tuesday through Thursday, said Mike Palmerino, forecaster with Telvent DTN weather service. "The deep freeze next week will create major icing on the rivers and we are keeping an eye on the possibility of a big storm forecast for the South that could edge its way into the Midwest," he said.
Ice occasionally halts commercial traffic on the Illinois River at times during the winter, but the waterway generally remains mostly open through the season so exporters rely on supplies from the area. Peoria Lake, a wide stretch of the Illinois River in the central part of the state, was 100 percent covered with ice on Friday for at least two miles upriver from the Peoria Lock and Dam, according to the US Army Corps of Engineers.
Grain shippers said icy conditions near Grafton, Illinois, where the Illinois River flows into the Mississippi, was also a major trouble spot for barge tow movement. Basis bids for nearby barge shipments of soybeans south of the ice clogged Midwest rivers climbed on Friday as the logistics snarls on the Illinois River restricted the flow of soybeans from parts of the No 2 soybean producing state.
Spot soybean barges in the relatively ice-free areas south of St. Louis and on the lower Ohio River were bid on Friday at 72 cents a bushel over Chicago Board of Trade March futures, a 2 cent premium to first half February loadings and a 4 cent premium to full-month February, traders said.
The inverted market illustrated the near-term supply squeeze, they said. "People are itching for beans to load boats at the Gulf. We're going to load a lot of beans at the Gulf in February and March so nearby here it's going to be a problem," a soybean trader said.
The CIF corn barge basis was near steady on Friday as many exporters at the Gulf had an adequate supply of corn on hand and were currently loading more soybean vessels than corn vessels. Barge freight rates were generally steady late this week on the Illinois River and on the Mississippi River near St. Louis as the slowed pace of barge loading following the midweek winter storm reduced demand for empty barges, brokers said. The Illinois and Mississippi rivers are key shipping channels for grain flowing from farms in the Midwest to export terminals at the US Gulf, where between 55 and 65 percent of all US corn, soybeans and wheat exit the country.