Cold, snow slowing logistics, mill operations
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KANSAS CITY — Bitter cold across much of the country east of the Rocky Mountains, along with ice or heavy snow in some areas was severely restricting grain and byproduct logistics and in some cases forced flour mills to temporarily halt operations.
While the lowest temperatures were in the Upper Midwest, with most of Minnesota not expecting highs above 10 degrees below zero on Jan. 6, the bitter cold was affecting transportation, livestock operations and grain and oilseed processing plants across the Midwest, Central states and Northeast.
Flour mill closings were mostly in Central states on Jan. 6, traders said, but more mills in the east and Northeast will be closed Jan. 7 as the severe weather moves to the east.
Trade sources said individual flour mills were shut down in Ohio, Indiana and Pennsylvania, among other locations. A major mill in Buffalo, N.Y., was planning to shut down for 24 hours beginning at 11 p.m. Eastern Time on Jan. 6, ahead of a major lake-effect snowstorm that may be measured in feet in some areas.
One source indicated his company’s mill in St. Louis had to shut down because rail switches were frozen and the railroad could not deliver wheat or take flour and millfeed out of the mill. A source at another major milling company said only one truck had arrived to haul millfeed out of one of the company’s mills in Minneapolis.
Other sources in the Central states and further east indicated some mills were running out of wheat because of slow or no rail service, and may have to halt flour milling until the weather clears or warms and shipments resume.
The cold weather was expected to have a temporary steadying or supportive effect on millfeed prices, which have fallen sharply from nominal highs due to light supplies in mid and late December. Also, cold weather typically boosts feed demand as livestock eat more just to maintain body weight. The impact of a brief reduction in millfeed shipments will be somewhat mitigated by the fact the product was removed from many livestock feed rations due to high prices prior to the holiday break. Prices were just getting low enough to encourage re-insertion into formulations, one source said, but feed manufacturers aren’t clamoring for millfeed.
The cold weather effects on rail transportation has been noted for several days, if not a few weeks, as it has contributed to slow rail car loading of wheat and other grains, and light spot offers in Kansas City and Minneapolis.
The most bitter cold of the season early this week also was a concern for the hard red winter wheat crop across the southern Plains and the soft red winter wheat crop in the Central states. While snow provided a protective blanket to dormant wheat in most of the two regions, the severity of the cold still supported winter wheat futures prices.
A significant warming trend was forecast for parts of the hard red winter wheat belt later this week, which likely will melt the protective snow cover, which may increase concerns about heaving, as alternative freezing and thawing may damage plants’ roots.