Printable Page Corn News   Return to Menu - Page 1 2 3 4 5 6
Market Matters Blog           12/19 11:22
Informa: Beans Acres Exceed Corn Acres
Logistic, PNW Labor Issues Hurting Business
Milder Weather, Lower Freight Volumes Allow Railroads to Boost Performance 
Everyone Needs a (Marketing) Code They Can Live By
Early Ice on Lake Superior, PNW Traffic Improves
Early Winter Weather Adds to Rail Problems 
UMR Shipping Season Comes to Close
PNW Shuttles Slowed This Week by Cold, Snow; Casselton Derailment Adds to 
Snow Snarls Harvest
Weekly Railroad Updates Show Mixed Results in Service Improvements

Informa: Beans Acres Exceed Corn Acres

   OMAHA (DTN) -- Private analytical firm Informa Economics sees farmers 
planting more soybean acres than corn acres next year for the first time since 

   Based primarily on its survey of producers in December, Informa said farmers 
are likely to plant 88.8 million acres of soybeans next year and 88 ma of corn. 
The changes are slight adjustments to group's prior estimates. 

   "Informa Economics made a slight reduction to their estimate for corn acres 
in 2015, from 88.3 million to 88.0 million acres," DTN analyst Todd Hultman 
said. "Their estimate of soybean acres increased slightly, from 88.3 million to 
88.8 million acres, based on their December survey."

   Informa's latest estimates are 3.2% lower than last year's corn acreage and 
5.5% higher on soybeans. Corn acreage in the Eastern Corn Belt is expected to 
decline 1 ma from 2014 while the Western Corn Belt is expected to decline 1.4 
ma. Soybeans are most likely to be planted on those acres, Informa said. 

   "As could be expected from these slight changes, corn and soybean prices 
showed no impact from Informa's report Friday and were trading lower both 
before and after the numbers were released," Hultman said. "The anticipation of 
more corn acres going to soybeans in 2015 gives new-crop soybeans an early 
bearish bias, but there is a long way to go before harvest next fall." 

   Informa's report included production forecasts based on trend-type yield. It 
projects corn production at 13.4 bb with a 165.9 bpa yield, and soybean 
production at 4 bb with a 45 bpa yield. 

   Winter wheat was seeded on 42.3 million acres this fall, Informa estimated. 
That's about 121,000 acres lower than last year's plantings. Hard red winter 
wheat area, at 30.9 ma, is 408,000 acres higher than last year. Soft red winter 
wheat planting is estimated at 561,000 acres lower than last year at 7.9 ma. 

   "Informa's estimate of all wheat acres slipped from 56.8 million to 56.6 
million acres and also had no visible impact on prices Friday," Hultman said. 

   All wheat production was projected at 2.21 billion bushels, about 180 mb 
larger than in 2014, Informa said. The all wheat average yield, at 45.6 bushels 
per acre, is about 2 bpa higher than last year. 

   USDA will release its initial winter wheat seedings report at 11 a.m. on 
Jan. 12. It will also release quarterly Grain Stocks, the Crop Production 
Annual Summary and the World Agricultural Supply and Demand Estimates. 

Logistic, PNW Labor Issues Hurting Business

   OMAHA (DTN) -- "Frustrated" was the one word Bob Sinner, president of SB&B 
Inc. located in Casselton, N.D., kept repeating during a recent conversation 
with DTN.

   Sinner's business manages the marketing and sale of an extensive line of 
identity-preserved (IP), non-GMO and organic products to customers worldwide 
and has been supplying food-grade crops both domestically and internationally 
for over 20 years. Lately, however, it has been a challenge to do so because of 
the most recent snafu in logistics: a stall in negotiations between the 
International Longshore and Warehouse Union (ILWU) and the Pacific Maritime 
Association (PMA). The ILWU in this case consists of a group of 20,000 workers 
and the PMA represents shippers, stevedores and terminal operators at 29 West 
Coast ports.

   Both organizations have been in contract discussions since May in hopes of 
avoiding problems when the contract expired on July 1 and eventually agreed to 
continue working under the current contract and continue talks. Sinner told 
DTN, "Here it is, five months later and things are only getting worse." 

   According to the PMA, tensions began to escalate in October, causing 
slowdowns and disruptions to container shipping. The union denied 
responsibility and told the press the problems were due to operational and 
logistic issues. 

   Sinner said both exports and imports of all containerized commodities are 
suffering. According to an article in the Minneapolis Star Tribune, "The 
dispute affects any cargo that needs to be shipped in containers, including 
fruit, vegetables, wine, beef and pork, high-protein distillers dried feed 
grain from ethanol plants, and specialty soybeans. It does not affect bulk 
vessels that ship Midwest corn and soybeans for animal feed abroad."

   In late November, the BNSF railroad ceased shipments from St. Paul of empty 
railcars heading for Seattle or Tacoma to pick up containers from ships. Sinner 
said his only "saving grace" was his ability to move containers out of 
Minneapolis on the Canadian Pacific Railway through Vancouver, BC. While this 
helped move some of the 240 containers of high-quality soybeans that he 
normally ships each month to the PNW, he said there are still many containers 
waiting to move.

   Sinner said others were not so fortunate. He mentioned vegetable and fruit 
producers on the West Coast had to dump product in fields because the products 
weren't getting shipped and therefore spoiled.

   Sinner is concerned his customers will get tired of waiting and look 
elsewhere for product, like Canada and South America. Sinner's customers reside 
in 15 countries, including Japan, Korea and Taiwan, and each customer has 
specific instructions for every bag of non-GMO soybeans that are shipped. He 
said his customers will not tolerate late arrivals of soybeans and will charge 
late fees or even cancel the delayed shipment altogether; a very costly 
situation for Sinner's business. 

   A small container shipper told DTN he has been unwilling to make sales 
because he is unsure if they will ship or not. "You can imagine what is 
happening to other guys and the losses in fresh fruit, veggies, hay off 
California, Oregon, Washington; losses are in the nine-digit range and jobs are 
being lost." 

   Sinner told DTN the only glimmer of hope right now is the scheduled caucus 
in San Francisco beginning on Dec. 15 between the ILWU and PMA. 

   "Every port on the West Coast is suffering right now," said Sinner. "While 
there are strong hopes for a resolution during the caucus, it would still take 
weeks before the members vote. It is so frustrating not knowing what is going 

   On Nov., 17, a group representing United States agriculture and forest 
products producers -- including farmers, food processors, exporters, and 
transportation and logistics providers -- wrote a letter to President Barack 
Obama urging him to send a labor mediator to help reach a contract deal. In the 
letter, the group warned, "There is nothing that we produce in this country in 
agriculture and forest products, that cannot be sourced somewhere else in the 
world. We can grow the best in the world, but if we can't deliver our products 
affordably and dependably, the customer will go somewhere else and may never 
come back." 

   According to the Minneapolis Star Tribune, "A White House spokesman said the 
president is monitoring the situation, but isn't planning to force a 

   Here is a link to the letter written to the president:

   Mary Kennedy can be reached at

   Follow Mary on Twitter @MaryCKenn

Milder Weather, Lower Freight Volumes Allow Railroads to Boost Performance 

   OMAHA (DTN) -- Milder weather and lower freight volumes have helped improve 
railroad service across the country, according to a recent BNSF report.

   In its weekly service update, BNSF said that operations remained fluid over 
the past week with strong gains in on-time performance across all business 
groups. "With Thanksgiving behind us and freight volumes returning to their 
traditional levels, locomotives are becoming more available and favorable 
conditions exist for improved velocity and network performance as we approach 
the New Year. We also expect milder, above-average temperatures throughout much 
of the network, particularly in the North Region, during the upcoming week."

   One snag in service last week was a derailment on Dec. 1 near Wadena, Minn., 
which closed both tracks. Service was restored by Dec. 4, and traffic is once 
again moving at a normal pace. 

   The ongoing labor dispute in the Pacific Northwest is still an issue for all 
railroads in that corridor. BNSF said it is continuing to manage service 
inconsistencies at the ports and in some cases have place restrictions on some 
export/import traffic at several of its hubs. BNSF said, however, some of those 
restrictions were "subsequently withdrawn based on a daily evaluation of 
conditions. With port operators and dockworkers resuming contract negotiations 
this week, we continue to hope for a resolution in the near future."

   According to its weekly update to the Surface Transportation Board (STB), 
BNSF cars due in North Dakota rose to 3,783 versus 3,145 the prior week. 
Montana's total was lower at 1,361 versus 1,381 the prior week, and Minnesota's 
total was also lower at 617 versus 891 cars the prior week. Shuttle turns per 
month to the PNW was steady at 2.4 TPM versus the desired turns of 2.5 per 

   To see all of the Class 1 railroad service updates to the STB on Dec. 3, go 


   This past August, the Canadian government raised the minimum weekly volume 
for shipments of grain that Canadian Pacific Railway (CP) and Canadian National 
Railway (CN) have to move in order to alleviate the rail backlog in Canada that 
was costing farmers and grain handlers lost revenue. The original mandate of 
500,000 metric tons of grain was set in March, and in August, the mandate was 
raised to 536,260 metric tons with an expiration date of November. If the 
railroads did not meet those mandates, there were monetary penalties to be paid.

   On Saturday, Nov. 29, the Canadian government extended a mandate for the 
movement of grain by rail through the end of March 2015. The new weekly minimum 
will require the CN and CP to ship 200,000-465,000 metric tons and can 
fluctuate in that range through March 2015. Dow Jones reported the following 
targets for Nov. 30, 2014, through March 2015:

Time period                                      Metric tons per week
Nov. 30, 2014 to Dec. 20, 2014                   345,000
Dec. 21, 2014 to Jan. 3, 2015                    200,000
Jan. 4, 2015 to Feb. 21, 2015                    325,000
Feb. 22, 2015 to March 21, 2015                  345,000
March 22, 2015 to March 28, 2015                 465,000

   The mandate is designed to ensure Canada's grain crop is moved in a timely 
fashion in the hopes of preventing the backlog that left nearly 30 million 
metric tons of grain waiting to be moved through the first half of 2014. 

   According to an article published by Argus Media, the government also 
ordered carriers to provide data on railcar order fulfillment by corridor, 
including the placement of cars at producer loading sites and along short-line 
railways to help promote transparency, a similar request made in the U.S. by 
the Surface Transportation Board. The difference is that the Canadian order 
includes a penalty of up to C$100,000 per violation if a carrier misses its 
quota, while there is no monetary penalty in the U.S.

   Small single-car grain shippers on short lines in Western Canada felt the 
original mandate only helped the large-unit shippers and left them short of 
cars most of the year with no recourse to the railroads. One of those shippers 
told DTN in an email that "It's nice to see the government appear to hold the 
railways to account, but it isn't clear that these orders do much to affect 
their performance ... except to give the railways another excuse to not service 
small shippers." 

   He went on to say that shippers continue to receive roughly "half of their 
weekly wants. With the new process of canceling unplanned orders at the end of 
each week, CN shows no backlog of orders. Since this implementation, we have 
had over 300 orders cancelled."

   He said that shippers have seen some cars most weeks, which is a huge 
improvement from last winter. "Service hasn't deteriorated ... yet." Many 
shippers wonder what will happen if the winter turns ugly and if railroad 
performance will suffer even with the mandates in place. Both railroads were 
also required to submit winter contingency plans to the government to include 
service strategies for "producer car loaders and short-line railways" through 
July 2015.

   Both the CP and CN have publicly stated that they will continue to meet the 
grain mandates even though they don't agree with Bill C-30. In April, prior to 
the mandate becoming law, the Calgary Herald reported that the CEOs of both 
rail companies expressed their opposition to the House of Commons. The Herald 
reported that CN CEO Claude Mongeau called the introduction of the bill "a sad 
day for Canada," while CP CEO Hunter Harrison called it "grossly unfair."

   The Herald also reported that Harrison told the government at the April 
meeting, "We are very concerned about the speed and lack of consultation by the 
government in making such significant changes to the rail transportation system 
that could result in unintended consequences for all stakeholders. We need to 
move away from reactionary legislative interventions that target unfairly one 

   Mary Kennedy can be reached at 
Follow Mary Kennedy on Twitter @MaryCKenn

Everyone Needs a (Marketing) Code They Can Live By

   DTN Senior Analyst Darin Newsom reminds me of the NCIS television show 
character Agent Leroy Jethro Gibbs every once in a while. They're both 
considered to be some of the best at what they do (analyzing markets and 
tracking down bad guys, respectively). They refuse to accept the easiest 
obtainable information as truth (USDA reports and plausible alibies, 
respectively). And they both keeps these weird lists of "rules" that can, and 
should, be broken in certain circumstances. 

   Agent Gibb's list of rules is much more extensive than Darin's, but then 
again his job is to solve heinous crimes and capture the world's worst 
criminals. Darin's mission is, perhaps, a little narrower and a whole lot 
nicer: to help farmers understand the markets and make better marketing 

   To use Gibb's words: Everyone needs a code they can live by. Darin has a 
similar philosophy, although I've never heard him articulate his rules all 
together, at once, until this morning at DTN University's Master Marketing 
course in Chicago. If I could only tell you how many times I've heard about 
Rule No. 1 or Rule No. 2. In all honesty, I've never been able to keep them 
straight, so I'm going to make you (and me) a little cheat sheet. 

   1) Don't get crosswise in the trend. 

   Some people would also describe this one as "the trend is your friend." But 
if you've read Darin often enough, this is where he often refers to Isaac 
Newton's First Law of Motion in its application to markets: a trending market 
will stay in that trend until acted upon by an outside force. That outside 
force can be a lot of things, like a change in fundamentals or simply a strong 
change in speculative traders' viewpoint. 

   Now, when it comes to looking at trends, Newsom's pretty strict. There are 
short term charts (daily), mid-term charts (weekly) and long term charts 
(monthly). Daily charts can gyrate heavily on news that doesn't fundamentally 
change the markets direction and often show technical signals that don't 
materialize. On the other hand, monthly charts can take too much time to 
reflect a major change. So Newsom likes to look at charts of weekly prices to 
gauge the trend of the market. 

   2) Let the market dictate your actions. 

   While this rule is very simple in concept, Newsom's interpretation is 
structural, taking all of the emotion or attempts to outguess USDA reports out 
of the equation. Farmers need to know how the basis, futures spreads, and 
futures contracts are trending. Futures spreads reveal the position of 
commercial grain traders. A strong carry situation is considered a bearish 
outlook, while a tighter carry is less bearish to neutral and an inverse is 

   The position of noncommercial, or speculative, traders is often revealed in 
the futures market and in the weekly CFTC Commitment of Traders report.

   Newsom created a matrix of market types based on whether commercial and 
noncommercial traders are bullish, bearish or neutral. He then matched them up 
with the best marketing strategy for that market type. Here's a link to the 
presentation he gave today, and the chart is near the end, page 30: 

   3) Manage margin risk. 

   "I've seen margin calls be the death of the best marketing plans I've seen 
in place," Newsom said. "By understanding the different types of markets, and 
that each has a different read, we can manage our margin risk by running it 
through different filters." Farmers need to think about price distribution, 
seasonality and market volatility when deciding what kind of strategy they 

   Like I mentioned earlier, Newsom's rules are not absolutes. Sometimes there 
are contra seasonal moves or excessive volatility that make a certain strategy 
impractical. And some of the market types are rare and tend to be very 
short-lived, like No. 7 when commercial traders are bullish and speculative 
traders are bearish. In that kind of scenario, it won't be long before one side 
changes its opinion. Most often, speculative traders will come around to 
commercials' point of view, but not always, Newsom said.

   Darin, like Agent Gibbs, stands firmly behind his rules, and only calls them 
"guidelines" when its absolutely necessary to break them. Gibb's rules are much 
broader, and he often refers to them as a code. I'm thankful Darin's are more 

    (For anyone who would like to look over Agent Gibb's Rules, here's a good 

Early Ice on Lake Superior, PNW Traffic Improves

   OMAHA (DTN) -- Michigan's Great Lakes started to see ice develop on them 
Nov. 15, the earliest in at least 40 years, according to the Daily Great Lakes 
and Seaway Shipping News on Nov. 25.

   The daily shipping newsletter said the Great Lakes Environmental Research 
Laboratory had reported that by Nov. 20, "Three of Michigan's Great Lakes had 
ice starting to form. Lake Superior and Lake Michigan were one-half percent ice 
covered, while Lake Huron had 1% ice. Lake Erie was not reporting any ice as of 
Nov. 20. Decent early season ice coverage records date back to 1973."

   According to the GLERL, Nov. 21 "was the earliest date that all three Great 
Lakes already had ice since the better reporting of early season ice began. 
Lake Superior actually had ice forming on Nov. 15 of this year. That is the 
earliest ice on Lake Superior in the good data set. Lakes Superior, Michigan 
and Huron had ice 10 days earlier this year than last year. Lake Superior only 
had five and a half months without any ice on the lake." 

   In 2013, the ice began to form on Lake Superior Nov. 25 and the last trace 
of ice on the lake was not gone until June 5 this year, a new record for the 

   The early ice means the shipping season is nearing an end.

   According to the daily port reports from the Great Lakes and Seaway Shipping 
news, "Weather permitting, St Lawrence Seaway will close at 11:59 p.m. Dec. 24. 
The Welland Canal will close at 11:59 p.m. Dec. 26, and the Soo Locks will 
close at 11:59 p.m. Jan. 15, 2015. Vessels will be allowed to complete transits 
of the Montreal-Lake Ontario section and the Welland Canal until 4 p.m. on Dec 


   In its weekly update to the Surface Transportation Board, Canadian Pacific 
said, "We indicated last week that overall congestion has improved in the 
Pacific Northwest (PNW) supply chain, in particular on the offline component of 
this corridor.

   "That has continued this week, resulting in improved overall transit times. 
The weekly grain car cycle time for this traffic is also improving as transit 
times improve. This in turn should result in greater placements," stated CP.

   Grain shuttle (or dedicated grain train) round trips for the PNW region 
improved to 1.7 versus 1.62 during the past month. 

   However, traffic heading east has experienced some problems because of the 
unprecedented snowfall affecting Buffalo. "With respect to eastern grain 
traffic," CP said, "we are experiencing longer cycle times for returning empty 
hopper cars due to off-line delays, partly as a function of the snow storms in 
Buffalo. We expect this to impact car cycles and order fulfillment next 
reporting week as well."

   Outstanding car orders owed in North Dakota were at 2,211 versus 2,684 the 
prior week, and were 3.84 weeks late, according to CP. Cars owed in Minnesota 
rose to 500 versus 374 the prior week, and were 1.06 weeks late. Cars due in 
Montana were unchanged versus last week at 150, and were 3.67 weeks late.

   Meanwhile, BNSF reported a mix of results last week in delivering cars.

   Cars due in North Dakota from BNSF dropped to 3,145 versus 3,340 the prior 
week. Montana's total cars rose to 1,381 versus 1,112 the prior week. 
Minnesota's total rose to 891 cars versus 809 the prior week. Shuttle turns per 
month to the PNW improved slightly to 2.4 TPM versus the previous week of 2.3 

   BNSF told the Surface Transportation Board in its recent update, "We repeat 
our earlier caution against drawing firm conclusions based on the absolute 
values reported in BNSF's report or across the various railroads that are also 
submitting data."

   BNSF added, it "will also continue to engage frequently and substantively 
with our customers through direct conversations, and through broader 
communications and letters, customer forums, meetings and broadcasts to provide 
real-time information around our service challenges, our short-term and 
long-term plans to increase network velocity, and our progress against those 
plans, and to ensure we hear their perspectives and feedback."

   To see all of the Class 1 railroad service updates to the STB on Nov. 26, go 

   Mary Kennedy can be reached at


Early Winter Weather Adds to Rail Problems 

   The early onset of winter-like temps and precip in the Midwest and Northern 
Plains led to delays and problems for rail traffic in the past week.

   In a weekly service update to customers, the BNSF railroad (Burlington 
Northern Santa Fe) reported, "The operation experienced some velocity 
challenges this week due primarily to frigid conditions continuing to impact 
the North and Central Regions. This unseasonably cold weather caused some 
modest traffic slowdowns as well as some negative effects on network fluidity."

   However, BNSF officials do not expect the weather-related problems to 
continue for long. "With network infrastructure adapting quickly to this early 
winter environment, we expect a continued improvement in train flows and car 
velocity heading into December," BNSF stated.

   Two derailments on Nov. 13, one in Casselton, N.D., and one on the Montana 
Rail Link line, also disrupted service last last week on the BNSF.

   "Due to the incidents, we implemented some rerouting of trains to alleviate 
backlogs on affected subdivisions. Train flows and routing through this area 
have returned to normal," the weekly service report stated.

   "With the strong volume of traffic that daily uses this line, traffic was 
staged through last weekend," said John Miller, BNSF ag vice president, in his 
weekly podcast. Staged means trains are holding, waiting to move into a 
terminal, due to backed up traffic.

   Both the BNSF and Canadian Pacific (CP) have recently experienced service 
disruptions in the Pacific Northwest due to an ongoing labor situation at the 
ports, along with excessive traffic creating slowdowns. "We have responded by 
implementing temporary restrictions for some export/import traffic at several 
of our hubs," BNSF stated. "While hoping for a resolution in the near future, 
BNSF will continue to evaluate and, in some cases, implement additional 
procedures to minimize impacts on service."

   The CP told the Surface Transportation Board in its weekly update, "As we 
indicated last week, overall congestion has improved in the Pacific Northwest 
supply chain, in particular on the offline component of this corridor. We 
expect grain car cycle times for completed trips to begin to improve over the 
next several weeks as the supply chain works through this re-set." 

   Overall cars due in the US from BNSF were at 6,321 and were 13.3 days late, 
the railroad reported. Of that total, cars due in North Dakota totaled 3,340 
and were on-average 14.1 days late and 1,112 were due in Montana and were 13.1 
days late. Shuttle turns per month to the PNW improved slightly from the 
previous week to 2.3 TPM.

   The number of outstanding car orders in North Dakota owed by CP were at 
2,684and were 2.94 weeks late, according to CP. Cars owed in Minnesota were at 
374 and were 1.26 weeks late and cars due in Montana were at 150 and were 2.67 
weeks late. Grain shuttle (or dedicated grain train) round trips for the PNW 
region were at 1.62 during the past month.

   Here is the link to all Class 1 Railroad updates to the STB on 11-19-14: 


   While Canadian railroads have made some progress in moving grain, some are 
still not meeting the required minimums set by the government. The Manitoba 
Co-operator reported a member of Parliament said the railroads "have not hit 
their targets for three weeks and no fines have been issued, not a single one." 

   "An enforcement process is underway, given CN's failure to meet the minimum 
grain volume requirements," Jeff Watson, parliamentary secretary to the 
minister of transport, told the Manitoba Co-operator. "That company is in fact 
facing fines and the enforcement process, as I said, is underway."

   With the rules governing the weekly minimum grain volumes set to expire at 
the end of this month, concerns are mounting across producer groups and 

   "In 2013, weekly movement fell off the rails in week 12 or the week of 
October 27 and didn't recover until after mandated volumes were introduced by 
the federal government," wrote DTN Canadian Grain Analyst Cliff Jamieson. 
"Concerns are growing that rail service could deteriorate should minimum volume 
mandates be allowed to expire. An informal DTN 360 Poll resulted in 68% of 
respondents suggesting that the mandates should not be allowed to expire but 
rather, should be viewed as an important first step in improving rail service 
for farmers."

   "Changes to the car-ordering system operated by Canada's two railways were 
highlighted in last week's press. In September, CN made changes to allow orders 
to be placed for just two weeks out, while in late October CP changed their 
system to allow for orders to be placed for a four-week window. This move is in 
stark contrast to the past where there were no limits placed on orders which 
resulted in a growing number of unfilled orders. Neither railway feels that 
this change in procedure will hamper their efforts to meet the weekly targeted 

   Mary Kennedy can be reached at 

   Follow Mary on Twitter @MaryCKenn

UMR Shipping Season Comes to Close

   OMAHA (DTN) -- "The Mississippi River will always have its own way; no 
engineering skill can persuade it to do otherwise," said Mark Twain. Mother 
Nature, too, has her own way and decided it was time to close the Upper 
Mississippi River for this shipping season until next spring.

   The U.S. Army Corps of Engineers, St. Paul District, said on Nov. 20 that 
they locked the last tow of the season for the St. Paul, Minn., area because 
ice conditions on the Mississippi River were making it hard for vessels to 

   According to the USACE, "The Motor Vessel Mary K Cavarra was locked through 
Lock and Dam 2, near Hastings, Minn., with four barges. Traditionally, the last 
tow heading south of Lock and Dam 2 has marked the unofficial end of the 
navigation season for the Twin Cities portion of the St. Paul District." This 
closing came earlier than normal and many elevators in that area scrambled to 
get their last barge loaded and sent downriver before it closed. The Gavilon 
elevator at Red Rock had posted this on their website last week: Special 
Message from Gavilon Grain - Red Rock: river closing early...bring all bean 
deliveries by this Sunday, Nov. 16. 

   The Mid-Mississippi corridor is expected to close at the end of November, 
unless the icing becomes a bigger issue downriver. KWWL, Dubuque, Iowa, 
reported, "At least four or five boats north of the Guttenberg Lock and Dam 
early Nov. 20 struggled to break through the ice." Lockmaster Marvin Althoff 
told KWWL, "It's a long and painfully slow process. The ice isn't new, but the 
timing is causing headaches. This is a little more ice than we normally have at 
this time of year on the river," he said. "As a result, we have a lot more tows 
up above that are wanting to get out yet and there are 22 boats navigating some 
pretty thick ice -- up to 8 inches thick in some places in the Mississippi 

   If you remember this past spring, the navigation season didn't officially 
start until April 16 when the Angela K reached St. Paul, Minn. The USACE said, 
"The spring start was one for the record books with ice thicknesses in Lake 
Pepin, near Red Wing, Minn., reaching 32 inches in some locations. This season 
was the second latest start to navigation in the district's history, too." 

   "Despite the late start and needing to close the 9-foot channel for 26 days 
in at least one location to perform emergency dredging after the June floods, 
the cargo tonnage is up more than 10% at the mainline locks from Hastings to 
Lock and Dam 10 in Guttenberg, Iowa," said Bryan Peterson, St. Paul District 
Mississippi River program manager. "Industries saved more than $300 million by 
using the navigation channel instead of overland shipping methods." 

   Mike Steenhoek, executive director of the Soy Transportation Coalition told 
the Minneapolis Star Tribune, "Corn and soybean growers within 70 miles of a 
river terminal usually find it economical to send their grain to river 
terminals, unless they sell it closer to home for animal feed, ethanol plants 
or other uses. But the recent delays, shortages and high costs to move export 
grain by rail are driving more business to barges. Normally, some grain 
handlers will say that the river's too far away and it just doesn't pencil 
out," Steenhoek said. "But with rail service being what it is, they're willing 
to drive further to access the river."

   But now, that will all come to an end until next spring thanks to Mother 
Nature who decided to bring an early start to winter in the Midwest.

   Mary Kennedy can be reached at  

   Follow Mary Kennedy on Twitter @MaryCKenn


PNW Shuttles Slowed This Week by Cold, Snow; Casselton Derailment Adds to 

   The early arrival of winter weather with record cold and snow in parts of 
the Midwest and Northern Plains slowed rail transportation of agriculture 
products this past week, according to one railroad official.  

   In the BNSF weekly podcast Friday, John Miller, BNSF's ag vice president, 
said, "Our manifest train size as well as crew van restrictions due to snow and 
road conditions in the north have been impacted." The weather affected the 
capital tier replacement along the Northern Corridor, causing major service 
interruptions this past week, he added.

   The BNSF website reported that the operation was affected by the winter 
weather that hit much of the north and central regions of the country this past 
week. All-time record-cold temperatures for November were set in many 
locations, including some that had stood for over a century. While operation 
performance remained steady during the early portion of the week, there were 
some effects on network fluidity due to the unfavorable conditions.

   Miller said that "while the pipeline to the PNW export facilities is down 
10% week over week, daily deliveries by the BNSF continues to be seven to nine 
trains per day." He added, "Trains staged at the PNW have been moderate this 
past week and will remain so over the weekend."

   According to the BNSF podcast, October was a record month for ag volume to 
the Pacific Northwest (PNW), setting records in North Dakota, South Dakota, 
Minnesota and Montana combined. Miller did say that shuttle turns per month 
(TPM) were not at the desired 2.5 to the PNW, but "our service is more 
consistent." That was in reference to the track improvements made by the BNSF 
in recent months along the northern corridor, expanding capacity. Miller also 
said that the BNSF will remain focused on servicing non-shuttle customers as 

   However, the weekly BNSF service update to customers stated that, "In 
addition, the labor dispute affecting operations at ports in the Pacific 
Northwest and California remains an ongoing issue. With work slowdowns causing 
some disruption to export/import traffic, BNSF will continue to evaluate and, 
in some cases, implement procedures to minimize any impacts on service." 

   The podcast was aired prior to the most recent setback, a two-train 
derailment at Casselton, N.D., Thursday night. The Grand Forks Herald reported 
that, "No one was injured when 12 to 13 empty crude oil cars from a westbound 
train and an unknown number of cars from an eastbound train carrying lumber 
derailed Thursday." The BNSF reported on their website Nov. 15 that, "The first 
track was put back into service at 09:35 p.m. Central Time on Nov. 14, 2014. 
The second track was put back into service at 11:50 p.m. Central Time on Nov. 
14, 2014. Customers may experience delays of 36 to 48 hours on shipments moving 
through this corridor." This was unwelcome news for shuttle loaders east of the 
derailment who have reported slow turn times, which is also evident in the 
falling secondary freight costs that, as of Nov. 13, were at zero for the last 
period for November and at $0/$200 per car for December.

   The BNSF reported that system-wide, cars owed are at 6,395 and on average 
are 14.5 days late. North Dakota is owed 3,139 cars and is 16 days behind; and 
Montana is owed 1.059 cars, 12 days behind. Here is the link to the BNSF and 
all Class 1 railroad service updates to the STB on 11-12-14: 


   The cash ethanol market has been rising, partially due to rail logistic 
problems in both the East and West Coast markets. George Orwell, DTN/The 
Progressive Farmer energy reporter, said that, "Trade sources talked of a lack 
of rail capacity, especially for the West Coast, and a winter snowstorm in much 
of the country that made it difficult to deliver supplies to destination 
markets. Logistical problems across the country are keeping some trade hubs 
from being supplied adequately and on time."

   According to the BNSF update to the Surface Transportation Board on Nov. 13, 
there were 100 loaded cars of ethanol and 128 empty ethanol cars that had not 
moved in greater than 120 hours during the week of Nov. 2 through Nov. 8. The 
total for ethanol cars not moved in greater than 48 hours but less than 120 
hours was 915 loaded and 1,032 empties.

   The Minneapolis Star Tribune newspaper reported on Nov. 16 that electric 
utilities that serve Minnesota say they still aren't getting enough coal. The 
article said that, "Two power companies that serve northern and western parts 
of the state have halted or reduced power generation at five coal-burning 
units. Almost all utilities are entering the winter with below-normal coal 
stockpiles that some executives say put the reliability of the electrical grid 
at risk. They blame persistent delivery problems at BNSF Railway, the major 
hauler of western coal burned in the Midwest. The railroad has struggled for a 
year to deliver traditional commodities like coal, fertilizer and grain while 
hauling increasing amounts of North Dakota crude oil." Electric utilities, 
which have long-standing relationships with BNSF, agree that the railroad is 
working hard. But they say it isn't enough, according to the article.

   According to the Association of American Railroads (AAR), during 
January-October 2014, rail shipments of coal were up a relatively small 0.3% 
from the same period last year. "Coal is still by far the largest commodity 
volume moved by rail, with 4.9 million car loadings," said the AAR. "Power 
plant operators are seeking more coal deliveries by rail to rebuild their coal 
stockpiles, which were drawn down during last winter's colder-than-normal 

   In its weekly service update to the STB, the BNSF reported there were 452 
loaded cars of coal and 795 empty coal cars of that had not moved in greater 
than 120 hours during the week of Nov. 2 to Nov. 8. The total for coal cars not 
moved in greater than 48 hours but less than 120 hours was 995 loaded and 1,151 

   The BNSF told the Star Tribune that the railroad is taking major steps to 
improve service, including capital investments in track upgrades, as well as 
logistical moves to speed up deliveries. "We are in regular communication with 
our customers, working with them directly on their most urgent issues, and we 
are making progress in continuing to grow coal stockpiles," the BNSF said in a 
statement to the newspaper.

   According to the Star Tribune, Minnesota's U.S. senators, Al Franken and Amy 
Klobuchar, and Gov. Mark Dayton have asked the Surface Transportation Board to 
require BNSF to file a "coal service recovery plan" with the government, a move 
the railroad strongly opposes. The Western Coal Traffic League, a trade 
association for coal shippers, and several other utilities have joined in the 

   "Winter is here for all practical purposes," Franken told the Star Tribune 
in an interview. "We're still digging our way out of backlogs caused by the 
extreme cold of last winter. There have obviously been increased shipping 
demands because of the crude. So this is a problem, and they need to address 

   The BNSF told all of its customers at the end of October that it will go 
into the 2014-15 winter season better prepared than ever before, especially if 
the United States experiences a return of the polar vortex. "The 2013-14 winter 
was one of the most severe winters the United States has experienced in decades 
with extreme temperatures that persisted for long periods and created special 
challenges for operating the railroad," said the BNSF. Here is the link to 
their Winter Preparations and Plans: 

   Mary Kennedy can be reached at   

   Follow Mary Kennedy on Twitter @MaryCKenn

Snow Snarls Harvest

   The television monitors at Reagan National Airport looked like they were 
bleeding. Two thirds of the inbound flights faced delays related to this year's 
first big snowstorm, and I crossed my fingers that my flight route through 
Atlanta would get me home.

   Many farmers woke up this morning feeling the same way -- hoping they'd 
still have time to finish up harvest before the death knell of a snowy winter. 

   Fortunately, I made it home without a hiccup. It looks like farmers have a 
pretty good chance of finishing harvest, too. 

   Monday's crop progress report shows that corn harvest is 80% complete, a far 
cry from where it was in 2009 -- the last record corn harvest. In fact, most 
major corn states are light years ahead of where they were in 2009. Check out 
the table below comparing the harvest completion percentages for those years. 

State 2009 2014
IL      31   87
IN      41   71
IA      34   82
MI      16   34
MN      23   90
NE      30   79
ND       3   73
OH      37   67
SD      18   84
WI      23   50

   "Greatest issues this year are in Michigan and Wisconsin -- but even in 
those states, harvest is more than double its percent progress compared with 
five years ago," DTN Senior Ag Meteorologist Bryce Anderson said. "And the 
Minnesota and North Dakota totals are obviously far, far better than back in 

   He said the forecast is cold and dry next week, so farmers are still likely 
to make more progress before winter shuts them down for good. DTN Cash Grains 
Analyst Mary Kennedy spent some her career in northwestern Wisconsin, and she 
thinks some corn could be left standing over the winter. But it's also not 
unusual in that area. 

   Wisconsin's crop progress report made for some interesting reading. Its 
headline: Farmers Race Oncoming Snow. 

   "Farmers were scrambling this week to get fieldwork done before oncoming 
winter weather. Rain and snow events late in the week interrupted fieldwork and 
drove up grain moistures in the eastern portions of the state. This 
precipitation made for slick field conditions and wind reportedly lodged 
standing corn in some areas. However, conditions across the rest of the state 
were much drier, allowing good progress on fall fieldwork. With substantial 
snow and much colder weather in the forecast, reporters were concerned about 
the amount of corn and soybeans still to be harvested and the amount of manure 
still to be spread. Several reporters noted farmers working through the night 
to clear fields while conditions allowed. The corn silage and soybeans harvests 
were nearing completion, as was winter wheat planting. Grain driers were going 
full blast across the state but some producers were reportedly still delaying 
their grain corn harvest until moisture content falls naturally." (You can find 
the whole report here: 

   I'm glad I made it home from Monday's USDA lockup, and I hope farmers can 
say the same about this year's corn harvest.  

Weekly Railroad Updates Show Mixed Results in Service Improvements

   OMAHA (DTN) -- The large volume of soybeans moving from the upper Midwest 
for export is causing delays in rail shipments to the U.S. Pacific Northwest, 
according to Canadian Pacific railroad's weekly service update to the Surface 
Transportation Board.

   "Our railroad does not reach the PNW," said the CP, "so transportation from 
origin to the destination for this traffic is dependent upon fluid movements 
through the entire supply chain." The CP routes its trains destined to the PNW 
from Minnesota, North Dakota and South Dakota through Kingsgate, BC, and then 
on to the Union Pacific railroad in the U.S. 

   "Car cycle times for both our manifest and dedicated grain trains involved 
in this PNW traffic have grown over the last several weeks due to off-line 
congestion in the supply chain. This has been particularly pronounced for our 
dedicated trains where CP trains are being held at loading origins, as well as 
being staged on sidings across our network, en-route to interchange. We are 
working closely with destination terminals and connecting roads to manage train 
slots and maintain network fluidity as the supply chain works through these 
challenges. As a consequence of this effort, we are beginning to see an 
increase in consistent and timely train delivery at interchange locations." 

   The CP reported the weekly average terminal dwell time measured in hours, 
excluding cars on run-through trains, was 19.4 versus 18.3 the prior week. CP 
reported 32,682 cars on the line for the week, which included 15,966 covered 
hoppers and 9,826 tank cars. The weekly total number of loaded cars in revenue 
service that have not moved in more than 120 hours was three for crude oil, 
zero for ethanol and 134 for grain. Outstanding car orders in North Dakota were 
at 2,324 versus 2,529 the prior week, 210 in Minnesota versus 304 the prior 
week and 200 in Montana versus 104 the prior week. Here is the link to the 
entire CP service update to the STB on Nov. 6:

   The BNSF also reported slowdowns in the Pacific Northwest. In its weekly 
update to customers, the company said, "We also continue to monitor the labor 
slowdowns affecting operations at ports in the Pacific Northwest. While effects 
on service have been manageable to this point, BNSF will continue to evaluate 
and, in some cases, implement new procedures to minimize any impacts on service 
throughout the network." The ports of Seattle and Tacoma are reporting labor 
"slowdowns" in recent weeks as the International Longshore & Warehouse Union 
continue to negotiate a contract with the Pacific Maritime Association.

   The BNSF said it is also wrapping up work on several major projects across 
the North Region ahead of the winter. "We anticipate that the first blast of 
Arctic air will arrive across the upper Midwest and Northern Plains next week 
(week of Nov. 10). This early season cold snap will bring temperatures as low 
as the 10s and 20s in some areas, as well as the chance for accumulating snow, 
starting Monday. This week, we completed an additional eight miles of double 
track on our Glasgow Subdivision, which runs from Minot, N.D., to eastern 
Montana. Maintenance work in the Dilworth, Minn., area is also ending, while 
work along the Minneapolis/St. Paul to Chicago main line is scheduled to finish 
in early December." BNSF's weekly service advisory can be found here:

   Here is the link to see all of the Nov. 5 Class 1 railroad service updates 
to the Surface Transportation Board:


   The mandate issued by the Canadian government to railroads requiring them to 
move 500,000 metric tons of grain weekly or be fined, will expire on Nov. 29. 
There has been talk that the mandate may be allowed to expire, which is not 
sitting well with farmers and grain shippers, especially those who don't ship 
the large-unit trains that railroads prefer to move.

   A short line in western Canada told DTN that shuttle loaders get their car 
orders, but when it comes to smaller units, it is difficult to receive them in 
a timely manner, and none of their shippers can get all the cars they want when 
they want them. 

   A farmer who is serviced by a short line in southwestern Canada said that 
while service has improved slightly, the biggest problem his short line is 
facing is they are still trying to clean up old orders. Because of that, grain 
companies wanting crop for their milling customers are relying on truck 
movement instead of rail because they can't depend on the rail service going to 
U.S. destinations, which hurts business on the short lines.

   Short-line railroads would like to see the north/south movement addressed 
under the current legislation and also change the order to require railroads to 
deliver cars to the corridors that are currently coming up short on their 
orders. The Leader Post reported in a statement issued by Canada Agriculture 
Minister Gerry Ritz's office Tuesday, "Minister Ritz has stated that no 
decision has been made with respect to volume requirements. The ministers of 
transport and agriculture will receive advice from the CTA (Canadian 
Transportation Agency) and will make a decision in due course." 

   Regardless of the outcome on Nov. 29, it appears that this issue will 
continue to be a contentious one and, in the end, the smaller shippers and 
farmers that rely on them may continue to be the ones suffering the most.

   Mary Kennedy can be reached at

   Follow Mary Kennedy on Twitter @MaryCKenn



Get your local Cash Bids emailed to you each morning from DTN – click here to sign up for DTN Snapshot.
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN