CHICAGO (Reuters) - Grain barge shipping came to a near standstill in parts of the U.S. Midwest on Thursday as recent heavy rain and melting snow swelled rivers, halted barge loading and sidelined the towboats that haul farm belt crops to Gulf Coast export terminals.
The flooded waterways sent cash premiums for corn barges delivered to Gulf Coast terminals soaring. Rates hit peaks on Thursday that have not been seen in 18 months, as exporters scrambled to secure enough grain to top off vessels bound for overseas markets, traders said. [GRA/F]
Barge lines suspended operations on northern sections of the Illinois River, with water levels already near record crests, or forecast to reach those levels by the weekend, according to National Weather Service river forecasts.
The flooding prompted CME Group Inc to declare a condition of force majeure on Thursday afternoon, because the majority shipping stations for its Chicago Board of Trade corn futures contracts are unable to load grain.
Several grain elevators along the lower Ohio River stopped loading barges because the rising river made it impossible for the vessels to get beneath grain spouts, according to grain barge traders.
Near Cincinnati, mariners were warned that boats may be unable to get under bridges as the river approaches an anticipated crest near 60 feet (18.3 m) early next week.
“We’re all having difficulty moving stuff around right now,” said a grain barge operator, who asked not to be named because he is not authorized to speak the media.
“It’s when you get on the Ohio and the Mississippi from Cairo (Illinois) and south, that’s where the elevators may not be able to load and the boats may not be able to move,” he said.
U.S. grain exporters such as Archer Daniels Midland Co and Bunge Ltd rely on inland rivers to transport corn, soybeans and other farm products to terminals near the Gulf of Mexico for export. Some 60 percent of all U.S. grain exports exit the country via the Gulf.
The shipping headaches come amid a recent spike in overseas demand for U.S. corn which had revived a previously sluggish export program.
Exporters have sold more than 9.1 million tonnes of corn over the past five weeks, the strongest stretch on record, according to U.S. Department of Agriculture data. The agency is due to release the latest week’s sales data on Friday, with analysts expecting at least 1 million more tonnes of sales for the week. [USDA/EST]
Reporting by Karl Plume in ChicagoEditing by Matthew Lewis