Low water levels impact grain exports and prices
Farmers are facing new marketing challenges as Mississippi River levels near Memphis, Tennessee, drop below normal. These declines have pushed the soybean basis lower and triggered barge restrictions. Basis, the difference between local cash prices and futures, usually follows river levels, and this year it has fallen faster than usual.
The U.S. Coast Guard imposed barge draft restrictions on September 2, 2025, limiting barge depth and tow size. This means fewer barges can move soybeans, corn, and rice south to New Orleans, restricting export flow.
University of Arkansas economist Hunter Biram explained that grain elevator operators expect higher barge freight rates as river levels continue to sink. He also noted the lack of Chinese soybean purchases as another factor dragging down the market.
According to USDA’s August export sales report, the U.S. has sold 7.2 million tons of soybeans so far, nearly 3 million fewer than last year, with China missing from the list. Mexico is currently the top buyer, followed by Pakistan, Taiwan, Egypt, and Japan.
Some farmers may store soybeans until prices improve, but this could add pressure on ending stocks. Without China’s participation, soybean carryover may rise. USDA estimates 2025/26 soybean stocks at 290 million bushels, slightly tighter than last year.
Corn and rice are also feeling the effects. Corn exports remain strong, with Mexico leading purchases, but record U.S. production is weighing on prices. Rice faces weak demand, with exports at half of last year’s pace and prices near five-year lows.
“I think that grain elevator operators on the river are anticipating the river to fall to those low levels which would then trigger those high barge freight rates,” said Biram. “I also think the fact that China hasn't bought any new crop soybeans is also playing into this.”