Jul

16

An often overlooked component of the grain market is Country Movement. Country movement is basically how much grain is being transported around the country, in and out of terminals, mills, ports etc for consumption, processing, or export. Grains primarily travel by barge, rail, and truck. Different grains are usually shipped differently with wheat being shipped more by rail to end users or ports than corn or soybeans. A bottleneck in any of those transportation systems will affect grain prices. Right now, a situation is developing where the Mississippi River is getting low and it's hard for barge traffic to move. While the forecasters are not expecting a repeat of 1989, it will be close. Barge traffic is by far the largest method of shipping grain for export.

While I'm on the very important subject of grain transportation modes, here is an illuminating paper that will provide a high level overview of the various grain shipping methods. This paper sorts out the different methods of shipping, costs, areas, and crop specific shipping domestic use, and exports.

Country movement is very important and I monitor it very closely, along with transportation costs, which greatly affect the end/retail price of the commodity. Another note, the Mississippi is such an important transport route that the top 4 grain companies own the top barge lines and control around 35-40% of the tonnage shipped on the Mississippi.


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