Soybeans on the move11/01/2017 | Soybean Exports, Transportation, Soybean News, Economics
By Matthew Wilde, ISA senior writer
No news is good news for transporting soybeans to market.
There are a sufficient number of barges, trains, trucks and ships to get a projected record soybean crop to processors and customers abroad. Currently, few bottlenecks exist among the multiple modes of transportation to impede delivery and harvest, according to Mike Steenhoek, Soy Transportation Coalition executive director.
Cooperatives and processors report farmers have elected to store crops and the transportation system is performing reasonably well. That combination has limited the number of chokepoints in the journey of soybeans and grain to domestic and international customers.
“So far, it’s pretty fluid,” Steenhoek said. “For Iowa farmers, there are no major hiccups on the inland waterways or anywhere along the system.”
As harvest approached, there was plenty to worry about.
Multiple hurricanes hit the Gulf and Atlantic coasts. But the impact on the soybean industry was negligible in the regions that sustained the most damage.
Hurricane Harvey devastated Houston and surrounding areas. Only 2 percent of soybean exports and 3 percent of corn exports leave Texas gulf ports of Houston, Corpus Christi, Galveston and Beaumont.
Parts of Florida and the southern East Coast were pummeled by Hurricane Irma. But the Norfolk area escaped relatively unharmed. Four percent of U.S. soybeans and 18 percent of soybean oil exports depart from the port region.
The big concern as far as grain exports was Hurricane Nate, which had New Orleans and the 230-mile stretch of the Mississippi River from Baton Rouge, Louisiana to the Gulf of Mexico in its sights. This area accounts for 60 percent of the nation’s soybean exports and 59 percent of corn shipments.
Nate made its initial landfall near the mouth of the Mississippi River as a Category 1 hurricane, but quickly moved to the east and weakened.
“The shipping channel was temporarily closed but it was back up and running quickly as the storm passed,” Steenhoek said. “An extended shutdown wouldn’t be good.”
As the corn harvest nears the half-way point and soybeans hit the home stretch, Steenhoek said any transportation delays would pressure already low commodity prices. Buyers widen basis levels to discourage grain deliveries.
“It’s about flow,” Steenhoek said. “If grain isn’t moving out the back door and storage is exhausted, you don’t want it coming to the front door.”
Harvest slowly continues
Forty-four percent of corn and 83 percent of soybeans are harvested statewide as of Monday, according to the U.S. Department of Agriculture Iowa Crop Progress and Condition Report.
Persistent, and at times heavy, rains since mid-September may have slowed harvest. But Mississippi River levels have improved. Reuters reports barges on the lower Mississippi weren’t loaded to capacity due to low river levels at the end of September, which is no longer the case.
Competition for rail service from the oil and coal industries isn’t a problem for grain shippers as it has been the past, Steenhoek said. It’s too early for snow and cold to slow trains.
“The weather is always the wild card. So far, so good,” he added.
For farmers like Robb Ewoldt, who live close to the Mississippi River and market a good portion of their grain out of the field, a fully-functional, multi-modal transportation system is critical.
Low water levels or a lock and dam failure on the river that slows or stops barge traffic can be costly. Ewoldt, an Iowa Soybean Association Board member from Blue Grass, said a 50-cent or more per bushel price drop can and has occurred as a result.
Ewoldt is glad it’s smooth sailing for barges on the river.
“We need it with the big crop,” he said. “Right now, cash soybeans are about 50 cents under (futures prices) at river terminals. That’s not very good here compared to other times of the year, but pretty good compared to the rest of the state.”
As of Monday, Ewoldt had about 1,000 acres of corn to combine and 65 acres of soybeans.
Corn yields are the best he’s has ever seen in Scott County. The yield monitor hit 400 in one field, Ewoldt said. Yields in the mid-200s to mid-300s isn’t uncommon. He said soybean yields averaged about 57 bushels per acre, down 7-10 bushels per acre from last year.
The latest USDA soybean production forecast is 4.43 billion bushels nationwide and 557 million bushels in Iowa. The state’s corn harvest is projected at 2.46 billion bushels, third-highest all-time.
Ewoldt added that lines at river elevators have been short to nonexistent, which keeps harvest moving.
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