The U.S. Coast Guard reported on Wednesday that low water levels have caused several barges to run aground in a crucial stretch of the lower Mississippi River just as the busy U.S. grain-export season begins.

Low water levels have slowed barge exports of grains and oilseeds for the third consecutive year. This has made U.S. exports more competitive on a market that is flooded with supplies. The timing couldn't be worse, as farmers prepare to harvest record crops of soy and corn and prices are hovering near four-year-lows.

In an email, the U.S. Coast Guard reported that it had received reports of several grounded vessels along the Greenville to Vicksburg section of the lower Mississippi River in the past week and responded accordingly.

American Commercial Barge Line warns customers to expect delays of up to two days for river shipments due to "reduced navigable space" in certain areas, the company stated on its website.

According to barge sources, sandbars have already started to appear on the Mississippi River near Memphis, Tennessee. According to the National Water Prediction Service of the National Oceanic and Atmospheric Administration, the Mississippi River gauge at Memphis, Tennessee, reached a record low of -12.04 ft in October last year.

NOAA data show that the water level in Memphis is expected to be -7,5 feet lower by September 18.

Mike Steenhoek is the executive director of Soy Transportation Coalition. He said that towing and draft restrictions were implemented, which limit how many barges are allowed to move, and how much can be loaded on them. The Coast Guard has said that if conditions worsen it will implement additional vessel and tow restriction.

The cost of importing grain from the United States is increasing as barge rates soar. Steenhoek data and USDA figures show that rates for barges from St. Louis Missouri were 65% more expensive in late August compared to the average over the past three years.

The low river levels are despite the heavy rains that fell during this growing season. This resulted to flooding and overly wet crops in large swaths across the northwest Midwest.

According to the U.S. Drought Monitoring, the abnormal dryness conditions and drought are now intensifying in the Southern Plains, Tennessee, and Lower Mississippi Valleys. This is creating a rapidly evolving flash drought.

Steenhoek stated that the secret to our success in the global market was always lower transportation costs. This further reduces our competitiveness. Reporting by P.J. Huffstutter Chicago. (Editing and reporting by Aurora Ellis; Additional reporting by Tom Polansek)

(source: Reuters)