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Cash Market Moves

21 Feb 2017

By Mary Kennedy
DTN Cash Grains Analyst

Punxsutawney Phil may have predicted six more weeks of winter on Feb. 2, 2017, but since then, temperatures have been warming in the Midwest. If the warm weather continues, we may see an early start to the grain shipping season on U.S. waterways this year.

Ice coverage on Lake Superior and on Lake Pepin is unseasonably light for this time of year. Both lakes are key to the grain shipping spring season opening, normally in late March or early April.

On Feb. 3, DTN Senior Ag Meteorologist Bryce Anderson reported, "The updated outlook for February has nearly the whole continental United States in warmer-than-average conditions more likely."

On Feb.17, the NOAA Great Lakes Coastal Forecasting System (GLCFS) reported that total ice coverage on the Great Lakes was at 13.3% vs. 20.3% at the same time in 2016, with Lake Superior coverage at 5.9% vs. 9.5% in 2016 on the same date. The Coast Guard issued a warning that, "Unseasonably warm air temperatures will cause frozen waters to melt at an alarming rate and may cause misperceptions about Great Lakes water temperatures, which will remain dangerously cold, posing safety concerns for anyone venturing onto the lakes." Strong winds in recent weeks also have helped reduce ice cover, breaking up any ice that had formed.

The Great Lakes and Seaway Shipping News reported as of Feb. 18, the opening of the 2017 navigation season is scheduled to take place on March 20 at 8 a.m. with vessel transits subject to weather and ice conditions. Restrictions may apply in some areas until lighted navigation aids have been installed. Early ship traffic will be limited to a maximum draft of 26 feet, 3 inches in the Montreal/Lake Ontario section of the Seaway until the South Shore Canal is ice-free or April 15. The maximum draft then increases 3 inches through that section and the Welland Canal. The opening of the Sault Ste. Marie locks is scheduled for March 25.

In 2016, the Great Lakes spring shipping season commenced on March 21 as the St. Lawrence Seaway opened two weeks earlier than normal, with no ice hindering ships thanks to the warm weather. The very first ocean-going vessel (saltie) of 2016 sailed into the Port of Duluth-Superior beneath the Aerial Lift Bridge on April 3, 2016, officially opening the grain-shipping season.

On Wednesday, Feb. 15 crew members with the U.S. Army Corps of Engineers (USACE), St. Paul District took the first of their annual measurements on Lake Pepin, finding less ice on the lake than in previous years at the same time of year. Lake Pepin is located 60 miles downriver from St. Paul, Minnesota, and is the widest naturally occurring part of the Mississippi River. Pepin is the last roadblock for barges waiting to come upriver to open the spring shipping season. It is basically the only "highway" to get to the St. Paul Mississippi River District, which is home to many grain terminals that ship barges of corn, soybeans and feed grains downriver.

The Corps reported that the thickest ice on the lake measured 17 inches, about 1 mile southeast of Lake City. However, when they went 3 miles north of Lake City, they encountered open water. Crew members concluded that "this is the least amount of ice they've seen on the lake in the last few years." Measurements will be taken every week or two and will be used to decide when it's safe for barges to break through any remaining ice and begin the navigation season in the northern portion of the Upper Mississippi River. Tows will typically move barges through ice no thicker than 10 to 12 inches so they don't risk damage to their vessels.

In 2016, the first tow passed through Lake Pepin to reach St. Paul, arriving on March 13. The USACE said the 10-year average for the first towboat to arrive in the St. Paul District is March 24. The earliest date for an up-bound tow to reach Lock and Dam 2 was March 4, in 1983, 1984 and 2000, according to the USACE. The latest start to a navigation season since 1970 occurred on April 16, 2014.

WILL PLANTING SEASON OPEN EARLY IF WARM WEATHER CONTINUES?

While planting season is not too far away for states such as Texas (corn planting started Feb. 17 in south Texas), Arkansas (corn planting started Feb. 18 in parts of the state) and Mississippi, warm air temperature does not necessarily mean that spring planting would start any sooner than normal. Soil temperatures at a 2-inch depth should be 55 degrees Fahrenheit by 9 a.m. for three consecutive days for good corn germination. Also, in some parts of the Midwest, fields may be too muddy as frost leaves the ground earlier than normal and continued warm weather speeds that process up.

The other key component in deciding to plant early that famers need to be aware of, is crop insurance plant dates. Planting dates for corn in the key growing states are usually April 6 to April 11 with the latest date being in the Northern states. Crops planted before the specified earliest planting date will not be eligible for replanting payments.

Anderson noted in his Midwest moisture forecast on Feb. 13, that a large portion of the central and southern Midwest, portions of southeastern Iowa, much of Illinois and Indiana, and most of Missouri is quite dry. Precipitation since last October is in many parts of this sector, running well under half the normal amount. "In fact, almost all of Missouri is in abnormally dry or moderate drought stages, according to the U.S. Drought Monitor. In contrast to the northern areas, this part of the Corn Belt could use some moisture," said Anderson.

Heading to the Upper Midwest, the scene is much different. The Red River Farm Network reported in their Feb. 6 newsletter that, North Dakota Ag Weather Network interim director Daryl Ritchison thinks spring will be on the cool and wet side of average. "I don't know if we'll get extremely cold or extremely wet, but leaning in those two directions, a little cooler and wetter than average," added Ritchison. "The last two springs, we've had very little snow. We were able to get into the fields with warm, dry and no snow to melt very early. This year, there are greater odds of having to wait for the snow to melt and it will take a while to get rid of that snow." That could give the perception of delayed planting.

While the warm weather may be a temptation for farmers to start spring field work early, much needs to be considered before they take their tractors out of hibernation and head to the fields to officially start the 2017 growing season.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/SK)