Export uncertainty casting shade over grain markets | NETWORK

As harvest continues across the Midwest, a bottleneck along the Midwest’s rivers is causing challenges for terminals that rely on barge traffic for their grain.

Farmers who sell grain to those terminals are noting that prices have gone down as low river levels have slowed or stopped barge traffic altogether. Those impacts may be felt for a while in the markets, said Don Roose, president of US Commodities in Des Moines.

“Not only on the Mississippi, but on the Missouri you are seeing them not fill things as full and you can’t tie as many barges together,” Roose said. “It’s late in the season to get rains up north to come down and improve the waterways. This year, it’s just not going to happen, so from here until the end of the season, you just kind of have what you have.”

Roose said it has made freight rates higher, making prices at the Gulf of Mexico not as competitive. Right now, markets are around $1 higher at the US terminals than at Brazilian terminals. That is one reason US exports are down nearly 51% from this time last year.

“Some of it is the waterways, some of it is we just aren’t as competitive,” Roose said.

The markets have also started to price in much of the estimated US crop based on the October Supply and Demand report, which Roose said “probably ended the uncertainty” for the supply side of the balance sheet. The next major focus for markets is going to be on South America where there is continued talk of a large crop.

Elsewhere, the ongoing Russia-Ukraine war continues to make for volatile markets, with what Roose calls “Putin rallies” that occur when something significant happens in the conflict, causing uncertainty around the world and markets rise.

“It’s happened since February when we blew up over $12,” he said. “You go up on uncertainty and then it starts to drift back down.”

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