Grain barges in a shallow river

Minimal Rainfall Impacts River Dynamics During Big River Harvest Season

During the last three weeks, the Big River Rice & Grain service area has experienced minimal rainfall forcing the dynamics on the Mississippi River to slow down. Normally, barges can travel throughout the river with a load size and speed that are both efficient and cost-effective. Due to the low water levels, barges have been forced to reduce the amount of grain they transport by one-third. The smaller load sizes combined with slower travel times and a reduced number of total barges transporting grain have forced the price of transportation to quadruple.

This unexpected circumstance increases the risk for producers due to the potential for higher expenses, lost time out in the field harvesting, and not being able to store or sell product that is harvested. Big River used this as an opportunity to provide service to producers by creating merchandising strategies that minimized the pricing risk, by keeping wait times short and dump times fast, and by storing and piling extra grain so that it could get out of the fields and into a marketable positon. Justin Towery, Vice President of Merchandising, said, “We were willing to take on the risk for producers and to provide a way for them to get their crop out of the field. Because of our unique network of facilities, we were able to accommodate producers where some competitors were not, and we hope that brings value to our relationships.”

Towery forecasts the river levels to return to their normal state within the next seven to ten days, although it is possible that Big River and its area producers will be feeling the effects of the river dynamics until the end of the year. During this time, Big River will continue to provide risk-minimizing, cost-effective and efficient service to our producers.

To learn more about the service Big River provides and what we can do for you, visit our website and locations:

Lake Providence Operations

Two Management Trainees Join the Big River Team

Earlier this year, Big River Rice & Grain took new steps to invest in the future leadership of the company by hiring two management trainees. This program is designed to identify and capture young talent with the intent that they will be developed into professionals with long-term positions in the marketplace. Big River Vice President of Merchandising Justin Towery states, “The goal of this program is to expose a trainee to the operational and commercial side of the business. After one year of training, they will be evaluated and offered a job where their strengths are.” During that one year of on-the-job experience, a trainee will gain personalized training in our Agspring corporate office located in Leawood, Kansas. Also, they will gain exposure to logistics, trading, futures, options, contracts, creating markets for producers, the day-to-day management operations at several elevators and producer interaction.

In April 2017, the first management trainee, Romeo Stalling, joined the Big River team. Stalling is homegrown Oak Grove native who has obtained a bachelor’s degree in business administration from Louisiana Tech University. Stalling began his experience gaining exposure to the operational side of the business by working at several locations including Pioneer, Lake Providence and Eudora.

In July 2017, Ben Gallant joined Stalling in the program to become Big River’s second management trainee. Gallant graduated from the University of South Florida with a bachelor’s degree in physics and most recently has had experience in teaching. Gallant began by gaining exposure to the commercial side of the business in the Pioneer corporate office. Stalling and Gallant will eventually trade places to learn the skills the other has already gained.

Big River is committed to equipping young leaders with the skills necessary to continue to grow valued relationships, provide efficient operations and serve the community. To learn more about the management trainee program and what Big River can do for you, visit our website and locations:

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Market Update October 2017

The monthly October USDA report surprised the market with a 2.1 BPA higher yield for the U.S. national average than what analysts were estimating. According to Advance Trading Inc., there is an adage in the grain trading industry that a “big crop gets bigger.” The same however, did not ring true for soybeans as the yield came in less than expected at 49.5 BPA vs. 49.8 BPA estimated and 49.9 BPA in the September report — which rallied SX17 futures 27 cents and left the industry wondering what the USDA would do in the November report as harvest really has just begun to heavily progress across the Midwest.

ATI suggests that uncertainty within the market can be turned into opportunity by implementing a disciplined risk management strategy. Other current market news provided by ATI can be found below and is important to take into consideration when strategizing to combat an uncertain market.

  • Trust the market: prices are cheap right now during harvest relatively speaking and the CME is paying farmers to carry most commodities to a later date. For example, CZ17/CN18 spread is at a 29c carry and SX17/SN18 is at a 37c carry — futures are telling us they want the commodity “tomorrow” but that doesn’t mean prices can’t go lower yet! Use storage, but don’t forget that the USDA and even world balance sheets are telling us there are plenty of corn, beans, and wheat to go around this year.
  • Rice harvest in the U.S. is 91 percent complete.
  • Rice futures prices are expected to remain sensitive to potential developments that surface from the ongoing NAFTA discussions in Washington, D.C.
  • Through Oct. 13, the 2017 crop insurance harvest price for December 2017 corn futures has averaged $3.4953.
  • Through Oct. 13, the 2017 crop insurance harvest price for November 2017 soybean futures has averaged $9.7015.
  • Mid-October corn export sales are coming in strong, but many experts believe the USDA is overshooting exports as the U.S. continues to remain uncompetitive compared to South America and the large corn crop we saw grown down there this past year.
  • Mid-October soybean export sales show increasing demand with China being the biggest buyer, and hopefully this demand continues to ramp up into winter.
  • Weather indicates that mid-October will be a huge harvest week for the Midwest region in corn & soybeans as we are currently 28 percent harvested on corn (47 percent average at this time) and 49 percent harvested on soybeans (60 percent average).
  • Barge freight was high due to hurricane issues, soybean harvest, and low water levels but has since become stable with plenty of barges in the system. This is what drove basis down early this marketing year and again has since stabilized.
  • Soybean market strength is timely for producers with peak harvest expected. South America is expected to grow another large soybean and potentially corn crop that they are planting now, so despite lower prices, continue to take advantage of rallies and low volatility (options are cheaper than most year) to manage your portfolio.

ATI further explains with the market continuing to shift and with a larger 2017-18 corn/bean crop, this type of uncertainty could make it very challenging for producers to succeed without a risk management plan in place.

Having a trusted partner and resource can help you create and implement your strategy for your operation. Be sure to stay in touch with your Big River manager or merchandiser as the market continues to unfold.