Floods after heavy rain shut 5 miles of the Mississippi River, the biggest U.S. inland shipping channel, and waters were forecast to climb to record levels in parts of Missouri and Illinois later this week.
The river between mile markers 179 and 184 near St. Louis closed around 11 p.m. local time Monday after water levels approached major flooding and strong currents impaired navigation close to bridges, Sean Haley, a public affairs officer with the Coast Guard in St. Louis, said in a telephone interview. Levels south of St. Louis in Cape Girardeau, Missouri, and Thebes, Illinois, probably will reach all-time highs, the U.S. Army Corps of Engineers said.
The river carries grain accounting for 60 percent of U.S. exports to two major ports in Louisiana. Flooding raised the costs for barge delivery to export terminals in New Orleans by 10 cents a bushel for soybeans and 5 cents for corn since Friday, Troy Lust, a senior risk manager for commercial grain at INTL FCStone Inc. in West Des Moines, Iowa, said in a telephone interview. Barge-freight costs rose about 2 cents a bushel, he said. The U.S. is the world’s top grain exporter and largest oilseed grower.
Illinois River
Barge loading will continue on the Illinois River, which means that as flooding crests, more supplies will be available to limit the long-term concerns, Lust said.
“It will be short-lived as waters are expected to recede with drier weather,” he said. “Exporters can still execute on the Illinois River at a time when shipping is usually shut by freezing weather.”
The first day for deliveries along the Illinois River against January soybean futures is Thursday. Prices are above the delivery equivalent and should limit supplies. In Chicago, January’s premium to March futures rose to the highest since August.
“Our extensive rail and road assets allow us to continue moving grain and other products efficiently when river operations are constrained,” Archer-Daniels-Midland Co., the top corn processor, said in an e-mail. “We’re making the appropriate adjustments in order to continue to optimize our network and move grain and other products as efficiently as possible.”
A measure of corn, soybean and wheat prices rose from a seven-year low. On Tuesday, the Bloomberg Grains Subindex rose 0.8 percent to close at 39.92 after touching 39.46, the lowest since Dec. 5, 2008. The gauge dropped in the previous five sessions, the longest slump since July 27.
In Chicago, wheat futures jumped 2 percent, the most since Dec. 3, on concern that flooding may damage crops in parts of Missouri, Illinois and Arkansas. Soybean futures climbed 0.5 percent, and corn advanced 0.4 percent.
Corn is the biggest U.S. crop, followed by soybeans, hay and wheat, government data show.