Barge freight fires US Gulf corn, soy CIF basis values as river levels rise

Heavy rain along the Mississippi Delta is causing further flooding along the key lower and middle Mississippi and Ohio Rivers, two of the main arteries that transport US soybean and corn into the US Gulf.

The move is bringing delays and disruption to barge movements, driving up prices and providing fresh support to CIF basis values in the key export hub, market sources told Agricensus Thursday.

“The US Gulf is on fire… corn barges are $0.12/bu higher since Monday,” one market source said.

“River levels are inching higher again forcing some tow restrictions from what I'm hearing. They won't be lifted until May 1st, so lots of boats sitting for weeks,” a second source said.

With barges delayed and restrictions in place, freight rates have firmed to provide additional support to CIF values that have already drawn support on a bout of logistical constraints.

However, basis indications are firmer with one market source seeing corn CIF barge values at around $0.56/bu over the front month contract for April delivery, and soybean basis values bid at $0.57/bu for April delivery.

That compares with $0.45/bu and $0.37/bu, respectively, for April corn and soybeans at the end of last week.

Increased freight rates underpin the move, with the USDA’s weekly grain transportation report highlighting the challenges as freight rates increase 15% on the Illinois River, 19% on the upper Mississippi, and 29% on the lower Mississippi River.

“Barge movements in the area between Baton Rouge and New Orleans require additional time and towboats to unload grain and return empty barges upriver, due to high and fast river conditions,” the report said Thursday.