Illinois exports about 50 percent of its corn crop each year. (Photo by Carrie Muehling/WJBC)

By Carrie Muehling

BLOOMINGTON – The threat of a delay in river traffic on the Mississippi River is already affecting basis levels in parts of Illinois.

As of Dec. 14, the water level at the St. Louis gauge stood at minus 2.75 feet.  The U.S. Army Corps of Engineers can maintain navigation between St. Louis and Cairo, Ill. as long as the river stays above minus five feet at the St. Louis gauge.  It appears the river could drop below that mark by Dec. 27.

Markets are reacting locally and internationally according to Phil Thornton, value enhanced project director with the Illinois Corn Marketing Board, who is keeping an eye on basis levels in Illinois.

“Between St. Louis and Cairo, the basis bids are $1.00 plus below the Board of Trade.  Elevators in that area are very skeptical about taking corn in and being able to ship it,” said Thornton.  “Obviously the low water has a huge impact to this, not only to the elevator systems, but also to the end users who are trying to get it down through the mid-Miss area.  They’re very concerned if the river is going to be closed if they’ll be able to actually get the corn.”

Illinois exports over 50 percent of the corn grown in the state.  Basis not influenced as much in the northern part of Illinois, where they still have ethanol plants, the container market and shuttle loaders.  Southern Illinois also has higher basis bids right now because of its proximity to the Ohio River.

Repercussions of a river shutdown could include fertilizer prices jumping $30 to $50 a ton.  More than 10,000 barges would be stopped, delaying about 300 million bushels of corn and other products from getting to market, which represent about $2.3 billion in value.  If a delay occurs, Thornton said export customers will look to Brazil for their products.

“Over the previous two days, South Korea bought 630,000 metric tons.  None of that will be coming from the U.S.  They will be sourced out of Brazil because they are just basically killing our export bid right now,” said Thornton.

Weekly export sales report of 10.2 million bushels brings the yearly total to 492 million bushels, only 43 percent of expected yearly total.

“I would anticipate that in the Jan. USDA report that they will probably have to adjust the export sales down,” said Thornton.

More information is available at www.ilcorn.org.  Click on the box labeled “River Watch.”

Carrie Muehling can be reached at carrie@wjbc.com.