Far Reaching Damage Caused By Hurricane Ida
Update for September 4th, 2021
Hurricane Ida has caused extensive damage to grain exporting facilities along the Louisiana Gulf Coast, which has disrupted normal crop trade routes in that region. This shipping region handles nearly 60% of all U.S. exports of corn, wheat, sorghum and soybeans which is forcing some of our largest buyers to look elsewhere for supplies. On Monday Cargill Inc. announced that one of their export elevators located 30 miles from the gulf shore, “sustained significant damage”. Repairs at the Cargill facility which has already handled nearly 9% of U.S. exported corn, soybeans and wheat so far this year, will take many weeks to complete. Many other facilities are reporting power outages as the only issue and hope to be back online soon. ADM and Bunge Ltd are also reporting damage to their grain facilities and port terminals. The hurricane was fierce enough to reverse the flow of the Mississippi River for a short-time causing several boats and barges to break loose as the sea water was pushed inland.
The Renewable Fuels Association has asked the EPA to allow more ethanol to be sold in regions affected by Hurricane Ida. Due to the potential for fuel shortages resulting from oil refinery shut downs and reduced capacity along the Gulf, many gasoline stations may not receive enough supply to meet customer needs. On Monday the RFA President and CEO Geoff Cooper wrote a letter to EPA Administrator Michael Regan requesting the agency allow more ethanol to be sold in these hard-hit regions to fill the void that has developed as a result of the storm. Progressive Farmer reports that Cooper also noted in the letter that most oil refineries in the Gulf Coast region are either shut down or operating at reduced rates. Which during normal operations these facilities account for approximately 12% of the nation’s refining capacities and current estimates indicate it could be four to six weeks before the refineries are back online.
(Photo by Wall Street Journal)
Next week the USDA will release their monthly report. As usual several private groups are releasing their crop estimates ahead of the report. The private firm StoneX (FC Stone) has increased their national corn yield estimate from 176.9 bushels per acre a month ago to 177.5. The firm also projects a slightly higher national soybean yield raising the average from 50.0 bushels per acre last month to 50.8. (StoneX estimates are determined from customer survey data) After the heavy, widespread precipitation across the Midwest last week some in the trade are now suggesting the potential now exists for an average soybean yield of +51 bushels per acre.
Recently NASS announced that they plan to review planted and harvested acreage for some crops in next week’s September report, a month earlier than normal. The agency says that the data for U.S. corn, sorghum, soybeans and sugar beet crops is “sufficiently complete” this year which allows for adjustments one month earlier than normal. NASS will review these crop numbers again in October along with canola, dry edible beans and sunflowers. (Reuters)
Labor Day weekend is beginning cool and wet today but starting tomorrow more pleasant weather is forecast. Seasonable temps are expected to stick around through mid-week but by the end of the 7 day outlook a ridge is forecast to build into the Midwest bringing above normal temps September 10-16th.