Hurricane Ida, which made landfall in Louisiana on Sunday, has caused extensive damage. The port facilities for grain exports also did not survive the hurricane unscathed. That makes the US grain markets nervous.
About 60% of US grain exports pass through the ports in the Mississippi Delta on the Gulf of Mexico. By disrupting the logistics chain, Hurricane Ida creates additional uncertainty in an already very volatile grain market. Grain and commodity trading company Cargill reports to Reuters news agency that 1 of the company's 2 grain terminals in the region has suffered significant damage. Archer-Daniels-Midland reports that the terminals have not suffered significant damage, but that power has been out in the region, causing the facilities to shut down.
Much is still unclear
According to various experts, a quick start-up of the ports is not possible. The area must first be declared safe by the government before the partially evacuated staff can return. The electricity network has also suffered major damage. No one can say whether the recovery from hurricane damage will take days, weeks or months.
Where possible, Gulf Coast ports are avoided and shipments are diverted to other regions. But that is often difficult because stocks of the old harvest are running out. When the American soy and corn harvest starts in a few weeks, this will change and stocks will increase again. Prices for wheat, corn and soy on the CBoT are under pressure due to the uncertainty caused by Ida. Also, no premiums are paid for deliveries in the Louisiana port area.