CME revokes corn force majeure on Illinois River loading

7 Mar 2018 | Tim Worledge

The Chicago Mercantile Exchange has revoked the force majeure that had been in place for corn shipping stations on the Illinois River as the majority of loading stations are now able to load barges again.

The force majeure was declared on February 22 when high water levels along the Illinois River prevented access to Exchange approved regular shipping facilities.

CME owns the Chicago Board of Trade, the exchange that lists the corn, wheat and soybean futures contracts, with the approved loading stations an essential part of the physical delivery mechanism that is meant to ensure physical prices converge with futures values.

The facilities are key cogs in the US domestic supply chain as well, ensuring that corn moves to the main arteries carrying products to export locations such as the US Gulf Coast.

In recent weeks, the demand for US corn globally has driven significant exports, but bad weather across western states has slowed rail moves to the Pacific Northwest, while flooding has hamstrung movements to the US Gulf.

Data from the USDA last week showed 68 vessels were in port as of February 22, the highest number since 2013 with FOB and CIF cash basis prices diverging as traders accommodate additional considerations such as demurrage rates.

Bids for CIF barge deliveries into the Louisiana region for March loading have seen consistent rises since the beginning of February, with indications for March loading reaching $4.4425/bu Tuesday, according to USDA data. 

A similar force majeure affecting wheat along the Ohio River remains in place.

Both the Ohio and Illinois Rivers are tributaries into the Mississippi, which is a significant transit route for corn, wheat and soybeans heading to the world export markets.