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Export grain prices soar as US shippers fear Mississippi closure
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JohnDeereGreenWKY
Posted 11/16/2012 23:54 (#2701501)
Subject: Export grain prices soar as US shippers fear Mississippi closure


By Karl PlumeNov 15 (Reuters) - The possible closure of the Mississippi River to navigation because of low water has sent prices soaring for grain destined for export from the Gulf of Mexico, grain traders said.Water levels on the busy stretch of the river from St. Louis to Cairo, Illinois, are forecast to drop to 9 feet or less by early December as drought conservation measures have reduced the flow of water from the Missouri River and its reservoir system into the Mississippi River.The threat that river shipments could be halted or slowed had exporters this week raising bids for grain to quickly get it to Gulf export points."There's a lot of concern right now about the river and logistics in general," a U.S. corn exporter said."If you're trying to run a river program and you have commitments to deliver corn in January and it looks like you're going to have river issues, you're going to expedite that sooner rather than later. Today was one of those days," he said.Spot corn basis bids in the Gulf barge market surged to a 90-cent-per-bushel premium to Chicago Board of Trade futures, the highest spot bid in four months. Basis bids for soybeans jumped to $1.01 over the respective CBOT futures, a 2-1/2 month high.Spot barge freight costs also spiked on Midwest rivers, jumping 75 percentage points of tariff on the Mississippi River at St. Louis and by 25 points on the Illinois River and the lower Ohio River.Any shipping problems from St. Louis to Cairo could shut off the flow of grain barges from the Illinois River, which often remains open through the winter.The grain shipping hub of St. Louis, where rail shipments from the heavy production areas of the western corn belt are loaded onto Gulf-bound barges, could be paralyzed.GOVERNORS PUSH TO KEEP RIVER OPENIllinois governor Pat Quinn urged the federal government to take "every possible measure" to maintain the flow of water on the Mississippi and Missouri Rivers to prevent expected restrictions or disruptions to commercial shipping traffic.Since most barge tow boats need a river depth of at least nine feet, a drop below that level would effectively halt the flow of grain to export terminals at the Gulf Coast, the main outlet for U.S. agricultural exports. A river closure could also impact barge shipments of coal, fuel, fertilizer, de-icing road salt and numerous other goods.Quinn joined fellow governor Jay Nixon of Missouri in calling for the federal government to rethink plans by the U.S. Army Corps of Engineers to draw down the volume of water released from upriver dams on the Missouri later this month."I ask that the Corps consider the impacts to river navigation as decisions are made regarding the release of water from Missouri River dams, and take all reasonable measures beneficial to river navigation and other uses," Quinn said in a letter to Jo-Ellen Darcy, assistant secretary of the army for civil works."In light of present levels on the Mississippi - even with current flow support from the Missouri - ending Missouri River support on December 1 threatens to slow or halt commerce on the Mississippi," he said.http://mobile.reuters.com/article/idUSL1E8MFHTV20121115?irpc=932
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