Supply

Soybeans Trapped in Upper Mississippi River Region

As of June 1, no crop volume has transversed Lock 15 at the Quad Cities. Even in 1993, the average water level was below flood level at Lock and Dam 15. Upper Mississippi River and Illinois River crop volume is significantly below normal. With the St. Louis harbor threatening the 1993 high water level record, the barge restrictions of tow configurations being reduced to five barges and only daylight transits from the St. Louis to Cairo section of the Mississippi River will remain in place for the near future. The Ohio River and the lower Mississippi River is still pumping out significant crop volumes despite Cairo to the Gulf tow size being lowered from 40 to 25 barges.

Note: Black Diamonds Represent Above Flood Stage
Source: USGS and NOAA

The following chart indicates that the monthly average water level at Lock and Dam 15 or Quad Cities was at a record high, and the forecast makes June water levels being record high a very good bet. For farmers located in areas dependent on the upper Mississippi River and Illinois River for transportation, their crops are effectively not available to the export market. Obviously, for a farmer that needs to sell, this situation limits the number buyers available.

Source: USACOE

Another issue in the future is storage availability. Typically, a farmer will clear out space before the next harvest arrives. Because the primary export season has passed, even with a China / U.S. trade agreement, much of the crops currently in storage will remain into the next export season, which starts about the second week of September or well into harvest. Of course, having product on hand does create opportunity if a major crop failure occurs somewhere in the world, and the U.S. could quickly fill the void.

Alan Barrett
Alan Barrett

Director of Consulting

Farm Journal

Alan Barrett is Doane’s project consultant and accomplished commodity economist with more than 25 years of experience in futures and cash markets with a focus on cotton, commodity projects, non-traditional agricultural products, transportation and supply chain studies. Alan spent six years as a commodity futures broker. His expertise encompasses feasibility studies of oilseed crushing plants (soybean canola, and cottonseed), grain elevators, export elevators, shuttle elevators, grain container operations, flourmills and other processing facilities. Alan also has conducted transportation supply chain studies for grains, oilseeds, fertilizer, coal, natural gas, crude oil, and petroleum products. Alan has considerable experience in non-traditional agricultural products such as coal, coke, natural gas, chemicals, hydraulic fracturing fluid, hydraulic fracturing proppants, glycerin, fertilizer, micronutrients, salt, limestone, cement, iron ore, pig iron, and steel, especially feed ingredients. Mr. Barrett has a BS and MS in Agricultural Economics from the University of Tennessee.