October 13, 2022

Grain exports at the US Gulf slowed by low Mississippi River

US Department of Agriculture data showed crop exports at Louisiana Gulf Coast terminals for the first week of October were at their lowest levels in nine years, during a time when export shipments increase, Reuters reported.

Last week, low water levels on southern stretches of the Mississippi River forced the closure of the main shipping waterway for days, stopping the movement of grain barges from Midwest farms to the country's largest grain shipping port.

The untimely shipping disruption occurs as farmers are working to harvest their top cash crops, corn and soybeans, leaving exporters scrambling for supplies at the start of the busiest time of the year for shipments of American agricultural products abroad.

The USDA reported that 976,255 tonnes of corn, soybeans, and wheat were inspected for export at the Mississippi River Gulf Coast in the week ending October 6, which was 22% below the prior five-year average and the lowest for the first week of October in at least nine years.

Over the weekend, two closed sections of the Mississippi River were reopened, allowing a backlog of stalled barges to start moving once more. However, low water levels remain an issue for shippers given the mostly dry weather forecast.

To prevent the barges from becoming stuck in the river that has been dried out by the drought, shippers are loading less grain onto each barge, and towboats are pulling fewer barges per tow to get through the congested channel.

When a third or more of the year's exports are typically loaded and shipped in the fourth quarter, traders anticipate a slow start for exports.

Terry Reilly, a senior commodities analyst with Futures International, said over the next few weeks, he anticipates inspections to be below average before really picking up, adding that if there are ships available, increasing shipments out of the Gulf doesn't take long.

-      Reuters