U.S. grain export terminal closed due to logistical problems

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U.S. grain export terminal closed due to logistical problems

Sept 16 Reuters - Barge freight costs for moving grains in the Midwestern United States spiked on Thursday due to ongoing logistical problems more than two weeks after Hurricane Ida, while CHS Inc said the timeline to reopen its terminal remains uncertain.

CHS Inc, a farmer cooperative and grain trader, said it expects its Myrtle Grove, Louisiana, grain export terminal to be operational by the height of the U.S corn and soy harvest but could not be more specific.

The terminal, which loads grain barges and unloads ocean-going vessels for export, remains without power from onsite utility provider and repair crews are using an onsite generator, it said. Power will have to be restored to resume shipments.

Ida damaged the region's power grid and destroyed some of the nearly dozen grain terminals dotted along the Mississippi River from Baton Rouge to the Gulf of Mexico, which form the busiest U.S. grain export hub.

Global grain trader Cargill Inc reopened its Westwego, Louisiana, grain export terminal this week, while rival exporters Louis Dreyfus Co and Archer-Daniels - Midlands Co have been loading export shipments for several days.

As grain handlers scramble to resume operations at the Gulf, China booked four to six bulk cargoes of Brazilian soybeans for shipment in October and November, during the peak of the U.S. export period. Those deals fueled industry concerns that Gulf terminal capacity would remain constrained into next month.

Cash grain traders concerned that the Midwest Rivers are elevating costs for barge freight along Gulf rivers. Delays in unloading barges arriving at the Gulf create a shortage of empty barges necessary to arrive upriver as the harvest of corn and soybeans begins in the heart of the Midwest.

Barges between Memphis, Tennessee and Cairo, Illinois were offered by Wednesday at 750% tariff, a surge of 650% two days earlier in the market where moves of 10 percentage points are more common.

Delicately, crops are maturing earlier than normal in key states such as Minnesota, Iowa and Illinois. 4 corn producer, the corn harvest was 3% mature at last by Sept. 12, and 34% of the crop was finished, compared to the state's five-year average of 20%, according to the U.S. Department of Agriculture.

The harvest was more advanced in southern states such as Mississippi, where 75% of the state's corn has been cut along with 18% of the soybeans.

The bulk of soybeans in top producing states Iowa and Illinois are generally harvested in October and export shipments normally peak during that month or the next. The corn harvest often occurs first, but often drags into November.

You've got these southern states, and you need to get all of that through the system before the real big volume comes from places like Missouri, Iowa, Illinois. That is certainly something to focus on, says Mike Steenhoek, executive director of the Soy Transportation Coalition.