US corn delays spark logistics fears as Upper Mississippi nears closure

A potent combination of the substantial US corn crop, delayed harvest and the approach of winter may coincide to complicate logistics in the upper Midwest, market sources said Tuesday.

Despite the well-documented delays in the corn harvest, the market has been surprised by the size of the crop and the improvement in yields across the region, which has fired expectations of a bigger harvest.

However, the late progress of the harvest – which has seen weather delays and low prices versus soy cut the incentive for farmers to harvest corn – means that logistics may become strained as the season grinds towards winter.

The USDA has already warned that the upper reaches of the Mississippi – the stretch that winds through the Upper Midwest states of Minnesota and Wisconsin – is likely to close in late November.

Ahead of the official closure, barges from the upper reaches will likely start their final journey of the year down the river from mid-November, effectively advancing the closure of the Mississippi by as much as two weeks.

“Logistics-wise, barge companies have told us that we have...through to the Wednesday before Thanksgiving [to move barges], but the river is getting close to freezing,” one Minnesota-based source said.

That meant farmers are having to make decisions around what to do with the outstanding balance of the harvest – to store it in elevators ready for spring, or move it out and run empty in order to take in the remaining harvest as the winter months approach.

“When you talk to the farmer, some say they will leave it to stand in the field – some still have soy to gather,” the source said, adding small and medium-scale farmers face some key decision.

“Some have thrown up more bins, some rented old bins, a lot in the Midwest are using bags to store it,” the source said.

The Mississippi River is a key conduit for soy and corn out of the region, with some of the biggest corn and soy-growing states bordering the river.

In the Upper Midwest, the US Corp of Engineers will make a decision on how safe the passage along the ice-strewn river is and typically make a decision to close the waterway towards late November.

However, barges will typically have to sail in advance of that decision in order to navigate all the way down to New Orleans.

The beginning of November saw the release of the USDA’s monthly WASDE report, in which the US corn crop size was revised upwards to 14.578 billion bushels with yields of 175.4 bushels per acre, while Monday’s Crop Progress Report highlighted the ongoing delay in gathering in the corn harvest.

According to the data, the harvest is now at 83% complete, some 9 percentage points behind the average harvest rate by November 13.

Some of the major Upper Midwest states of Michigan, Minnesota, Wisconsin and North Dakota have been particularly slowed as the winter weather has swept in.

Wisconsin is currently the slowest of the harvesters, at 56% complete it is 20 percentage points behind the 2012-2016 average crop rate. The state is the eighth biggest corn producer in the US, according to 2016 USDA data.