3 Big Things Today, May 14, 2021
1. Ag Markets Recover Overnight
After falling hard Thursday amid the news of a Mississippi River bridge blocking grain barge traffic, the grain markets look to start higher Friday.
In overnight trading, the July corn futures moved 6½¢ higher at $6.81. September corn futures traded 11¢ higher at $5.94. New-crop December corn futures moved 12½¢ higher at $5.70¾.
July soybean futures traded 24¾¢ higher at $16.08. July soybean futures moved 24¾¢ higher at $15.47. New-crop November soybean futures moved 13¼¢ higher at $14.09¼.
July wheat futures moved 18¢ higher at $7.19¼.
In the outside markets, the U.S. dollar is lower, and the Dow Jones Industrials futures are 147 points higher at 34,085 points.
Bob Linneman, Kluis Advisors, says that the markets were hit with a surprise this week.
“The big slide, Thursday, is primarily being blamed on a news report that barge traffic on the Mississippi was backed up due to engineering issues with a bridge. This headline likely scared a few longs into profit-taking. That quickly escalated as momentum sellers (and probably also algorithm trading systems) jumped on the selling bandwagon,” Linneman stated in a daily note to customers.
Linneman added, “Weather forecasts for the dry section of Brazil are suggesting possible rains just over a week from now. Is it too late? Some rain is better than none, but traders will want to see rainfall hitting the ground before they get too excited about changing opinion about the crop.”
2. Mississippi River Bridge Crack Moves Markets
A Mississippi River bridge on the Tennessee-Arkansas state line remains closed Friday, blocking shipments of grain.
On Thursday, the CME Group’s farm markets fell sharply, due to the closure of the bridge. At the close, soybean prices had plunged 58¢ and corn dropped its daily limit of 40¢.
On Tuesday, a bridge inspector discovered a “significant fracture” that has indefinitely closed the Hernando de Soto Bridge that carries Interstate 40 across the Mississippi River between Memphis, Tennessee, and West Memphis, Arkansas.
As of Friday morning, there are 52 vessels with a total of 901 barges in the queue.
The Tennessee Department of Transportation (TDOT) is conducting an inspection on the cracked beam.
“It will be up to TDOT officials to determine whether the bridge is safe enough for maritime traffic,” Carlos Galarza, petty officer, Coast Guard’s 8th District, told Successful Farming.
“The crack – located on a beam essential to the bridge’s structural integrity – was identified during a routine inspection that occurs every two years,” Mike Steenhoek, executive director of the Soy Transportation Coalition, stated in an email.
In addition to the suspension of vehicular traffic across the bridge, the closure has resulted in a temporary suspension of barge traffic passing underneath the bridge, Steenhoek says.
“It remains to be seen when barge traffic will be allowed to resume, but any suspension of traffic – even temporarily – on the Mississippi River is most unwelcome to U.S. agriculture. Almost every barge loaded with soybeans, corn, or other agricultural commodity along the Upper Mississippi, Ohio, Illinois, or Missouri rivers is destined for Gulf of Mexico export facilities near New Orleans and therefore must pass underneath the I-40 bridge,” Steenhoek stated.
News reports indicate that the bridge could open in the next few days.
3. Plenty of Midwest Rain Coming
David Tolleris, WxRisk.com, says that the month of May has been cold, with most rainfall staying away from the Midwest and Plains states.
However, the rains will arrive in the next 10 days.
First, over the next several days a trough from the western U.S. will come through the Midwest. A high pressure will dominate the weather map until a front drops down from Alaska next week.
“That will keep things dry for the rest of the week and weekend, with the exception of some light rains in the western Corn Belt and Plains,” Tolleris says.
Meanwhile, a front that comes up from the Gulf Coast this weekend will bring rains to Missouri on Sunday. That front lingers over the South and Southeast U.S. into Monday.
Next 7 days
At the start of next week, a massive trough forms on the west coast of North America. This brings significant rainfall to the western Corn Belt, perhaps between 2 and 6 inches from I-80 southward and the Canadian Prairies.
“The issue is that the rains next week don’t get into the eastern Corn Belt,” Tolleris says.
6- to 10-day forecast
When the big ridge flattens and allows the Pacific winds to come eastward, the rains develop in the Midwest.
Widespread areas will receive 1 to 3 inches of rain, he says.
Perhaps the bad news is that the forecasts do not include a lot of warm temperatures throughout the rest of May.
“Not a lot of sunshine in the six-, seven-, or 10-day forecasts,” Tolleris says.