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STU ELLIS: Hurricane Ida hurt us too

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STU ELLIS

STU ELLIS

Early Wednesday morning, two volunteers from the Decatur Red Cross Chapter prepared their emergency response vehicle for the drive down to Louisiana to help communities affected by Hurricane Ida.

Hurricane Ida blew through the Gulf Coast at New Orleans early last week, washing away homes, families and many lives.

It traveled up the Mississippi River Valley, made a right turn at Kentucky and did not even create a cloud over Central Illinois.

The Tropical Storm Ida merged with a cold front over the Appalachians and headed toward the Northeast and resumed its wake of death and devastation. It seemed like the Corn Belt escaped the severe weather without a cloud or a drop of rain.

That was true, but it did not escape the economic damage, particularly the damage along the Mississippi River where Central Illinois grain meets global buyers. And at that juncture, everyone in the Corn Belt is suffering financially, and likely will for weeks and maybe months to come.

Assessments are still underway of Ida’s damage, but Gulf grain terminals that account for roughly 61 percent of soybean exports and 68 percent of corn exports took a significant hit. So did the futures market which became concerned about the ability of the region to quickly resume grain exports.

September corn was down 50 cents for the week and December corn was down 29¾ cents, ending at $5.08 a bushel and $5.24, respectively. September soybeans closed down 76¼ cents for the week, to end at $12.83 and November soybeans were down 31¼ cents to $12.92.

So far this week, soybean futures have dropped another 15 cents a bushel for September and November. Corn futures are down 13 cents this weed for September contracts and down 15 cents more for December contracts.

The futures market is melting because currently it is impossible to move grain from terminal elevators onto ocean freighters, even if the ships could get to the loading docks. Electricity remains a rare commodity in the Gulf and the export elevators are well down the line behind hospitals and other priority locations that need faster reconnection.

Those terminals were receiving corn and soybeans from southern states when Ida struck and would soon be receiving grain from Illinois via Illinois and Mississippi river barges. American Commercial Barge Line noted, "Transit delays are to be expected well into September as boats, fleets, terminals and shipyards recover from this hurricane." Other barge lines noted the situation is "not good" right now and that it is likely nothing will move this week.

With barges not moving in the Southern Mississippi, they are not moving either in the Midwest, until there is a place to dock and unload, where typically 12 million bushels a day is transferred from barges, through terminal elevators, and onto ocean ships.

Without the flow of grain, the flow of money has also stopped, and there are no offers for corn bids in the Gulf and soybean bids are down 15 to 20 cents  from the prior week. As expected, river grain prices are weaker given that the Gulf remains a mess and shuttered for now.

A mess? Yes, the Coast Guard reported a "large field of partially sunken barges" along the west bank of the lower part of the river south of New Orleans with a significant number of barges and vessels sunk or grounded elsewhere.

Ida hurt us, too.


Stu Ellis is an observer of the Central Illinois agriculture scene. In addition to his weekly column, you can view his “From The Farm” and “Harvest Heritage” reports on WCIA 3 News.

 

 

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