Moving Grain: Lock Closures on Upper MS River; Rail Disruptions

©Debra L Ferguson Stock Photography

Highwater Causes Multiple Lock Closures on Upper Mississippi River

Heavy rains and the start of seasonal run-off from the melting of snow and ice have raised river levels throughout the central U.S. As of March 20, the following Mississippi River locks are closed: Lock 16, Lock 17, Lock 18, Lock 20, and Lock 22. In addition, the Mississippi River is closed at Louisiana, MO, where the rising river levels prevents barge passage under a bridge that spans the river.

There was a significant rebound in Ohio River barge traffic, as Smithland Lock and Dam (L&D) reopened on March 9. The Smithland reopening allows continuous down-bound traffic to Olmsted L&D, which had no grain barge traffic for the last two weeks. Grain barge traffic at Olmsted for the week ending March 16 was 427 thousand tons, the highest weekly volume for 2019.

However, during the same time period, there were only 466 grain barges unloaded in the New Orleans region, which have declined for five consecutive weeks and this week reached their lowest level since late May 2016. The reduced number of barges being unloaded in New Orleans is due to poor navigation conditions.

Rail Service Disrupted by Washouts and Flooding

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BNSF Railway (BNSF) and the Union Pacific Railroad (UP) continue to deal with record flooding throughout the Midwest. As a result of high water and washouts, the railroads have closed several subdivisions and issued embargoes. Outages are most severe in eastern Nebraska and western Iowa.

For BNSF, track in and around Council Bluffs and Sioux City, IA, and Omaha and Lincoln, NE, remain out of service.

For UP, the following routes remain closed between: (1) Missouri Valley, IA and Grand Island, NE; (2) Fremont and Lincoln, NE; and (3) Council Bluffs, IA and Kansas City, KS.

The railroads are working to restore track and reroute where possible. Shippers should expect continued delays on shipments scheduled to move through impacted areas.

Grain Inspections Continue to Decline

For the week ending March 14, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.04 million metric tons (mmt). This is a 12 percent decrease from the previous week, an 18 percent decrease from last year, and is 20 percent below the 3-year average. The drop in inspections was driven by a 42 percent decrease in wheat inspections.

Shipments of wheat, primarily bound for Asia, also dropped last week. Corn inspections were down 1 percent from week-to-week, but soybean inspections were unchanged. Inspections of grain in the Mississippi Gulf were down 14 percent from the previous week, but inspections in the Pacific Northwest (PNW) increased 3 percent.

Snapshots by Sector

Export Sales

For the week ending March 7, unshipped balances of wheat, corn, and soybeans totaled 33.5 mmt. This indicates an 11 percent drop from the same time last year. Net weekly wheat export sales were .263 mmt, a 58 percent decrease from the previous week. Net corn export sales totaled .372 mmt, down 62 percent from the previous week. Net soybean export sales were 1.91 mmt, up notably from the past week. Net soybean sales to China accounted for 89 percent of the total net soybean sales.

Rail

U.S. Class I railroads originated 19,218 grain carloads for the week ending March 9, which is down 5 percent from the previous week, 16 percent from last year, and 16 percent from the 3-year average.

Average March shuttle secondary railcar bids/offers (per car) were $1,617 above tariff for the week ending March 14, down $179 from last week. Average non-shuttle secondary railcar bids/offers were $400 above tariff, down $38 from last week. There were no shuttle or non-shuttle bids/offers this week last year.

Barge

For the week ending March 16, barge grain movements totaled 659,690 tons. This is 82 percent higher than the previous week and 21 percent lower than the same period last year.

For the week ending March 16, 389 grain barges moved down river. This is 141 barges more than the previous week. There were 466 grain barges unloaded in New Orleans, 4 percent lower than the previous week.

Ocean

For the week ending March 14, 30 ocean-going grain vessels were loaded in the Gulf. This is 19 percent less than the same period last year. Sixty-three vessels are expected to be loaded within the next 10 days, 2 percent more than the same period last year.

For the week ending March 14, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $40.00 per metric ton, unchanged from the previous week. The cost of shipping from the PNW to Japan was $23.00 per metric ton, unchanged from the previous week.

Fuel

For the week ending March 18, the U.S. average diesel fuel price decreased to $3.070 per gallon, 0.9 cents below the previous week’s average and 9.8 cents above the same week last year.

Full report.


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