UPDATE 1-Busiest lock on Mississippi River closed for repairs

Wed Sep 19, 2012 6:07pm EDT

* Lock 27 closed for emergency repairs, may reopen Thurs

* Closure costs industry an estimated $2.5 mln-$3 mln/day

* 59 vessels awaiting passage Wednesday afternoon

* Spot corn, soybean basis at the Gulf buoyed by closure (Updates number of vessels delayed, adds grain market impact, quote)

By Karl Plume

Sept 19 (Reuters) - The busiest lock on the Mississippi River remained closed on Wednesday after being shut for emergency repairs over the weekend, causing a backup of commercial vessels on the crucial shipping waterway, government officials said.

Lock operators hope to reopen the lock Thursday morning allowing river traffic to resume.

The closure of lock and dam 27, the southernmost lock on the Mississippi River's lock system and just upriver from St. Louis, is estimated to result in some $2.5 million to $3 million in lost revenue each day that it is closed as shipments of grain, coal and other commodities are delayed.

The lock was closed on Saturday after crews discovered damage to one of the lock's protection cells. The cells are rock-filled cylinders which vessels often bump against as they enter the lock.

Low water on the river following the worst U.S. drought in 56 years had exposed an unarmored portion of the protection cell and frequent impacts by vessels caused a breach, allowing some of the rock to spill into the channel and obstruct it.

"Both lock chambers, the main chamber and the auxiliary, are blocked by the rock that came out of the protection cell. Until we can guarantee safe approach there's no traffic moving," said Michael Petersen, spokesman with the U.S. Army Corps of Engineers St. Louis District.

A queue of 59 vessels was awaiting passage as of 1:00 p.m. CDT (1800 GMT) on Wednesday, said Colin Fogarty, public affairs officer for the U.S. Coast Guard's upper Mississippi River sector.

The queue included barge tows containing 419 barges, a freight volume equivalent to 5,600 railroad cars or 24,300 fully-loaded semi trucks, Fogarty said.

The Army Corps, which manages the lock system, expects to begin allowing passage of vessels by early Thursday morning at the earliest, Petersen said.

The Mississippi River is the main shipping waterway for grain moving from farms in the Midwest to export facilities at the Gulf of Mexico. Some 55 to 65 percent of U.S. corn, soybean and wheat shipments exit the country via the U.S. Gulf.

CASH GRAIN BASIS RISES

Cash premiums for barge loads of corn and soybeans delivered to the Gulf Coast have firmed slightly this week, partly due to the closure, traders said.

But further gains could come in the days ahead as some exporters may be forced to replace the corn or soybeans that will not be arriving as promptly as they expected, they said.

Basis bids for spot barge shipments of soybeans at the Gulf, including cost, insurance and freight (CIF), climbed to 74 cents a bushel over the benchmark Chicago Board of Trade November soybean futures contract, up 6 cents from late last week.

Spot CIF corn basis bids jumped to 63 cents over CBOT December futures, up 10 cents from Friday.

"It hasn't had too big of an impact. A lot of people seemed to be long beans and corn hasn't been a real pull to the Gulf because it's not competitive (on the world market)," a grain barge trader said.

"We could maybe see a blip in 7 days. It might spur some activity in the ETA market," he added, referring to barges traded based on a specific, typically short term, time of arrival at the Gulf. (Reporting by Karl Plume in Chicago; Editing by Bob Burgdorfer)

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