Dow Jones is carrying a very short blurb this morning excerpting some comments from the Cleveland Fed's notes in the Beige Book citing, "concern about stress on the freight-transport system from this year's grain harvest, which is expected to be at a historic high". They also cite the Atlanta Fed which noted, "significant strengthening" in grain shipments in the Southeast.
Here is the exact line from the Fed's Beige Book which can be found on their website: This is from the Cleveland Fed:
Contacts from trucking and railroads observed that insufficient capacity is a major issue that is currently confronting the industry and that there is concern about stress on the freight-transport system from this year’s grain harvest, which is expected to be at a historic high.
And now the exact quote from the Atlanta Fed's contribution to the Beige Book:
Overall, transportation contacts reported an improvement in demand since the previous report. District railroads cited increases in total carloads, led by significant strengthening in shipments of petroleum products; grain; and military, machinery, and transportation equipment. Intermodal traffic continued to increase on a year-over-year basis. Ports in the District reported a notable increase in container traffic and substantial growth in overall cargo tonnage in September.
Essentially, the Beige Book is confirming what most in the industry are already well aware of; that this year's massive crop is going to test the capacity of our transportation system as well as our storage ability.
Incidentally, soybeans are trading higher today with the complex being led higher by the meal. That tight carryover from last year's harvest is the reason as processers scramble to secure what is left of available beans in some regions while they wait for the new crop to make its way into the pipeline. With an open harvest window apparently in the forecast for the next two weeks or so, we should see significant harvest progress which will begin to finally remedy that tightness from last year's crop. The beans are transitioning from one of tightness to one of abundance.
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