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Drought-hit Mississippi River Threatens Corn, Soybean Exports

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The Mississippi River’s low water levels are starting to wreak havoc on corn and soybean exports just ahead of the US’ peak shipping season. While there is some rainfall in the forecast this week, it may not be enough to alleviate concerns that shipping costs and supply chain headaches will escalate. 

Southern Mississippi River bordering states’ September rainfall totals were all below the 10-year average. Low water levels are an issue throughout the entire system, however. Gro’s GPM precipitation data, aggregated by land area for all of the northern and southern states that border the river, shows a September rainfall total of 2.36 inches, 37% below the 10-year average. This is the second lowest September total for this combination of states since 2001; the lowest reading, 2.35 inches, was in 2017.  

The chart above shows that 2022 September rainfall totals, aggregated by the states along the Mississippi River, are at their second lowest total since 2001.

Most US corn and soybean exports are shipped down the Mississippi River, and the September to November post-harvest window is the busiest period for shipments. As of October 2, only 20% of US corn and 22% of US soybean crops have been harvested. But already shipment capacity restrictions and limits to the number of barges that can travel stretches of the river have been put in place, and a logjam of barges is building. 

As shipping goods via waterways is the most cost effective method of transportation for the grain sector, the Mississippi River’s low river volumes represent a real threat to US farmers’ profit margins.

Costs to transport grains and oilseeds down the Mississippi river have been soaring since August, according to Gro data

In recent weeks, as rising freight costs on the Mississippi and a strong dollar have been rendering other corn and soybean points of origin more competitive, US soybean and corn exports have slowed. In Brazil, for example, September corn exports were a staggering 6.8 million tonnes, more than double the volume from the same time last year. Currently, Ukraine corn is the cheapest offer as they hurry to export as much as possible before the November 22 export agreement is set to expire. 

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