Low water levels on the Mississippi River in the United States could have an impact on corn and other grain prices, but are unlikely to affect fertilizer deliveries into Canada, say officials.
The Mississippi River is considered low if the stage falls below five feet in Memphis, Tennessee. On Oct. 20 it hit a record low of -10.74 feet.
The stage bounced back to -0.79 feet on Nov. 18, due to rains in Kentucky and Tennessee that made their way into the river basin.
Read Also
New fertilizer product aims to reduce tie-up, improve soil health
A new phosphorus fertilizer, launched at Ag in Motion 2025, promises to reduce nutrient tie-up and deliver slow-release feeding throughout the growing season.
But that relief is expected to be short-lived with the long-term forecast calling for a return to -7.2 feet by Dec. 15.
The low water levels have limited both the number of barges operating on the river and the weight loaded on those barges.
The river system, which feeds ports in the Gulf of Mexico, is critically important for U.S. grain and oilseed exports.
That trade route accounts for 62 percent of all U.S. corn shipments, 51 percent of soybean exports and 12 percent of the wheat leaving the country.
Rich Nelson, chief strategist with Allendale Inc., said the barge restrictions could limit the amount of U.S. grains and oilseeds that make it to market this year.
He is particularly concerned about corn exports.
StoneX estimated that as of Nov. 3, corn shipments were 322 million bushels behind the pace needed to meet the U.S. Department of Agriculture’s export target, soybean exports were 76 million bu. off the pace and wheat exports were 18 million bu. behind.
Nelson isn’t overly concerned about soybeans because a lot of them are being routed to China through ports in the Pacific Northwest.
Soybean sales were nine percent above the five-year average, while actual exports were 10 percent below average as of Nov. 17.
“We have gotten through our peak shipping season for soybeans and we’re still OK,” he said.
The same can’t be said for corn. Sales are 38 percent below the five-year average, while exports are running 39 percent below normal.
Sales to China have been lackluster after two strong years due to stiff competition from Brazil. Brazil’s corn was US$60 per tonne cheaper than U.S. corn through much of October.
That gap has since narrowed to $20 per tonne, but it is still restricting sales. The Mississippi barge problems haven’t helped.
Nelson’s corn balance sheet has 2022-23 ending stocks of 1.258 billion bu., which is higher than the USDA’s 1.182 billion bu.
His export number is 50 million bu. below the USDA’s, and he also has a lower domestic ethanol usage number.
The USDA’s ending stocks number implies a $6.85 corn futures price. Nelson’s number equates to a $6.60 price.
But he is concerned the USDA could easily reduce its corn export number by another 200 to 300 million bu. in future reports, which would result in corn futures of $5.20 to $5.40 per bu.
Corn is the price leader in grain markets, so that would have the potential to drive down wheat and barley prices.
The market has been reluctant to factor in the potential U.S. export losses because of the offsetting factor of Argentina’s poor corn crop.
But Argentina received some decent rainfall the past couple of weeks and if that keeps up the U.S. export problems could start to weigh down prices.
The Mississippi River is also an important conduit for transporting imported fertilizer north from the Gulf of Mexico, raising concerns about North American fertilizer availability.
But that doesn’t appear to be an issue for Canadian growers.
“We’re not seeing any impacts from the Mississippi because most of the supply coming from the U.S. is imported by rail,” said Kayla FitzPatrick, spokesperson for Fertilizer Canada.
She said 76 percent of Canada’s imports from the U.S. are by rail and 24 percent by truck and product continues to flow north.
“It seems to be more of an issue impacting supplies in the U.S.,” said FitzPatrick.
Fertilizer Canada member companies see no red flags for western Canadian fertilizer supplies at the moment.
Contact sean.pratt@producer.com
