A need for empty barges prompted a spike in barge rates last week.

Barge rates on the Mississippi, Illinois and Ohio Rivers were all higher, which, according to one Quad Cities shipper, was due to a few shipping firms needing empties. The spike in rates prompted a drop in basis bids to farmers for corn and soybeans. However, the lower bids continued to attract farmer selling as the river market remained competitive with local processors, partly because of quicker turnaround times for trucks.

“We are going to be loading two barges a day for the next two to three weeks. That is real active,” said the shipper. “Barge rates took a big jump on Friday and that dropped our basis.”

Corn and soybeans going down river at a brisk pace created a need for empty barges and prompted a spike in barge rates last week. (Photo: Stewart Sutton/Thinkstock)

USDA’s weekly transportation report said nearly 903,090 tons of grain were shipped by barge during the week ended June 11, up 49% from the prior week and up 4% from a year ago. Year-to-date shipments are up 6% from 2015.

For truckers, the U.S. average diesel fuel price increased 2 cents to $2.43 a gallon in the week ended June 13. That is down 44 cents from the same week last year, the USDA report said.

Farmer selling was fairly light to start the week partly because of the lower markets the past two days and due to farmers having sold near the peak in the recent rally, when cash prices in some areas topped $4 for corn and $11 for soybeans.

Fieldwork this week is mostly fertilizer or chemical applications as planting is largely done. While rain is needed, grain dealers in Iowa and Illinois said the crops remain healthy.

“We haven’t had much rain for about four weeks,” said a grain dealer in western Iowa.

Forecasts call for rain several days this week and those forecasts also warn of severe storms and flash flooding for eastern Iowa, Illinois, Indiana and Ohio on Wednesday.

Late on Monday, USDA left corn unchanged at 75% good to excellent but trimmed soybeans 1 point to 73%.

Farm Futures calculated a 0.3 bpa slippage in its expected average corn yield to 172 bpa due to condition declines in Iowa, Illinois, Indiana and other states. The soybean potential slipped about 0.25 bpa to 48.1, with minor slippage in condition ratings in Iowa, Missouri, Indiana and elsewhere.

Weekly Grain Movement - June 13, 2016 - Farmers sell as markets move higher

Weekly Grain Movement - June 6, 2016 - Farmers rush to sell in latest market rally

Click on the link below for charts with more information on weekly grain movement.