Morning Report
Morning Arbitrage Brief
September 24, 2025 | 8:05 AM CT
Executive Summary
Our 16‑dimension manifold analysis processed 5,554 state‑to‑state/location price pairs this morning and surfaced 75 viable grain arbitrage opportunities across corn, wheat, and soybeans. Viables remain logistics‑heavy (88% truck / 12% rail) and policy‑affected: in the full candidate set, a majority of routes were at or near insurance price floors (3,325 below and 1,803 near). Breakeven stress continues to show up in the filtered set (19 routes flagged “DISTRESSED”), consistent with harvest cash‑flow pressure and tight transportation capacity.
Top Signals Today
- Missouri & Nebraska corridors account for a disproportionate share of high‑confidence routes.
- Processor/mill lanes in Indiana and nearby again post strong, short‑haul opportunities in wheat.
- Insurance floors remain binding across much of the sample; average floor distance in the total universe printed ‑1.5% this morning.
What’s Driving These Opportunities
1) River & Barge Constraints Still Binding
USDA’s latest Grain Transportation Report notes Mississippi River water levels around Memphis at ‑5.5 ft and falling, with Coast Guard restrictions (reduced tow size and draft) constraining barge capacity; barge movements from St. Louis to the Gulf are down year‑over‑year and freight rate indices remain elevated. That keeps truck and short‑haul rail more competitive, which mirrors our 88% truck share and the clustering of MO/NE routes. (USDA Agricultural Marketing Service)
2) New‑Crop Soybeans: China Quiet, Basis Soft
USDA AMS shows no 2025/26 new‑crop soybean commitments to China as of Sept 12, a sharp contrast to last year’s early purchases. The absence of the dominant buyer is one reason our model still finds soybean lanes viable into remaining export/processor corridors even with weak basis. (USDA Agricultural Marketing Service)
3) Big Crop, Heavy Logistics
Markets are digesting a record‑scale corn production outlook (USDA pegged 2025 corn at ~16.81 billion bu earlier this month), which elevates the need to move grain quickly and stresses local capacity—conditions that typically widen short‑haul spreads like those we’re seeing today.
4) Harvest‑Time Economics & Fuel
On‑highway diesel averaged about $3.74/gal mid‑September (EIA), keeping a floor under trucking costs. Combined with constrained barge drafts and seasonal rail tightness, this helps explain why the best returns are on selective short‑to‑medium truck lanes and a handful of rail corridors with reliable cycle times.
5) Weather & Finish
NOAA reports renewed dryness across parts of the lower Midwest in August, which slowed maturity in some areas while still tightening river conditions due to lack of runoff—a combination that tends to create harvest‑front cash needs and localized basis dislocations. That lines up with our breakeven “DISTRESSED” flags (19 of 75). (NCEI)
What We’re Watching This Afternoon
- River gauges & barge guidance (Memphis/St. Louis) for any easing/tightening that shifts truck vs barge economics. (USDA Agricultural Marketing Service)
- New‑crop export sales prints (particularly soybeans) for signs of China liftoff or continued delay. (USDA Agricultural Marketing Service)
- Local processor bids in IN/IL/MO for persistence of mill/processor premiums on short hauls.