Mississippi River closure would sink prices
New concerns were expressed Monday about the impact of a a closure of the Mississippi River to barge transportation, according to Dow Jones Newswires. While the prospect still remains unlikely, U.S. grain export demand "all but disappears for a moment" if it does occur, said Standard Grain's Joe Vaclavik. Already-low river levels have caused slow traffic and lighter loads for ships, Vaclavik said. An all-out closure would cause interior cash-grain basis levels to weaken along with nearby corn and soybean futures, he added.
"Traders are closely watching river levels and the potential that the Mississippi could be closed this month. Basis levels at the Gulf of Mexico are mostly unchanged today," Dow Jones reported.
In late November, lawmakers and leaders from industries depending on river transportation drafted a letter to President Barack Obama asking that the federal government help keep the Mississippi River flowing despite major cutbacks in Missouri River flow on account of the drought.
The group of 15 senators, 62 representatives, and leaders from the grain, fertilizer, metals, and export industries urged the President to create an "emergency directive" that would allow more water from the upper Missouri to flow into the Mississippi and prevent navigation disruptions.
The letter also asked if the federal government will mandate "blowing up rock formations that are hazardous at coming water levels," according to an FCStone report.
The requests came just two days after the Army Corps of Engineers began drawing down water levels on the Missouri River, a move industry members feared could send Mississippi River levels low enough to hinder all navigation, including the movement of grain to the Gulf of Mexico.
The Army Corps of Engineers' plan involves demolishing rocks in the river channel using explosives to enable continued navigation.
The area of greatest concern is around St. Louis, in the Thebes Reach of the river where rocks in the river channel are in danger of blocking any barges from passing.