Moving Grain: Flooding Stops Barge Traffic; Railroad Congestion at Mexican Border

©Debra L Ferguson Stock Photography

Flooding Stops Barge Traffic on Upper Mississippi River

Heavy rains and severe storms in Iowa, Illinois, Minnesota, Missouri, and Wisconsin, from June into October, have resulted in several instances of flooding through the region. As of October 10, the latest round of rain closed six locks on the Upper Mississippi River.

The southern-most lock closure is at Lock 22, near Hannibal, MO, which has stopped all export-bound barge shipments originating from points north; including Minnesota, Iowa, Wisconsin, and parts of Missouri and Illinois. Forecasts from the National Weather Service indicate that water levels at Lock 22 will not recede to navigable levels, until October 23.

Railroad Congestion Stops Grain Crossings at Mexican Border

Citing congestion across the Mexican rail network, Union Pacific Railroad (UP) and BNSF Railways (BNSF) recently issued embargoes for grain, oilseeds, and other traffic interchanging with Mexican carriers along the Texas-Mexico border. Embargoes are a temporary restriction on the acceptance and handling of freight. UP announced slow interchanges with Kansas City Southern de Mexico (KCSM) have created severe congestion at the UP/KCSM interchange at Laredo, TX.

Subsequently, it placed an embargo on southbound traffic through the congested area for intermodal, automotive, fuel, wheat, and corn traffic. Citing congestion at these crossings, BNSF announced an embargo on all grain, soybeans, dried distillers grain, soybean meal, and corn syrup destined for interchange with Mexican railroad, Ferromex (FXE), at Eagle Pass and El Paso, TX.

FXE has issued an additional embargo on receiving grain, oilseeds, and grain products in order to prevent further congestion on its network.

Diesel Fuel Prices Spike

During the week ending October 8, U.S. on-highway diesel fuel prices increased, just over 7 cents per gallon, to $3.385. Prices have increased 11.2 cents over the past 2 weeks, and 17.2 cents over the last 7 weeks. Increases in the crude oil market are putting pressure on diesel fuel prices. The futures market continues to closely monitor global supply as volumes from Iran and Venezuela are reportedly shrinking.

Snapshots by Sector

Export Sales

For the week ending September 27, unshipped balances of wheat, corn, and soybeans totaled 37.0 mmt, up 12 percent from the same time last year. Net weekly wheat export sales were .435 mmt, up 4 percent from the previous week. Net corn export sales were 1.43 mmt, up 8 percent from the previous week. Net soybean export sales were 1.52 mmt, up 7 percent from the past week.

Grain News on AgFax


Rail

U.S. Class I railroads originated 21,870 grain carloads for the week ending September 29; down 6 percent from the previous week, 7 percent from last year, and 11 percent from the 3-year average.

Average October shuttle secondary railcar bids/offers per car were $54 above tariff for the week ending October 4, down $246 from last week, and $254 lower than last year. Average non-shuttle secondary railcar bids/offers per car were $138 above tariff, down $3 from last week, but $174 higher than last year.

Barge

For the week ending October 6, barge grain movements totaled 541,650 tons, 31 percent higher than the previous week and down 9 percent from the same period last year.

For the week ending October 6, 340 grain barges moved down river, 79 barges more than the previous week. There were 800 grain barges unloaded in New Orleans, 6 percent higher than the previous week.

Ocean

For the week ending October 4, 31 ocean-going grain vessels were loaded in the Gulf, 11 percent less than the same period last year. Sixty-one vessels are expected to be loaded within the next 10 days, 5 percent less than the same period last year.

For the week ending October 4, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $47.50 per metric ton, 1 percent more than the previous week. The cost of shipping, from the PNW to Japan, was $26.75 per metric ton, 1 percent more than the previous week.

Full report.


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