Source: POLITICO'S MORNING AGRICULTURE, 10/15/18

Retaliatory tariffs have weighed down commodity prices for months. With the harvest well underway, the trade dispute with China is dealing another blow to U.S. soybean producers: a shortage of space in grain elevators that's causing major backups in states like North Dakota, Minnesota and Louisiana — and driving down prices even more.

China, the biggest market for U.S. soybeans, slapped 25 percent duties on the crop in retaliation for President Donald Trump's tariffs on Chinese high-tech products. Now it's effectively closed for business to American soy growers. Some farmers are gathering more soybeans than they can sell or store, jam-packed silos are running out of room, and the trains that usually carry soybeans to the Pacific Northwest for shipping to China aren't moving.

"In Southwest Minnesota and the Dakotas, you now have elevators that are storing all their beans because there's no market to the West. There is absolutely no bid," said Bill Gordon, a farmer in Worthington, Minn., and member of the American Soybean Association board of directors.

Gordon said some storage sites are piling corn outside to make room for soybeans, and that his local grain elevator is expected to be full after just one week of the month-long harvest.

Cash prices falling: The demand for storage space is also widening the gap between the market commodity price for soybeans and the cash price farmers receive for their crops at the elevator. Grant Kimberley, director of market development for the Iowa Soybean Association, said the drop-off — or "basis" — is normally 30 to 50 cents per bushel in central Iowa. Now it's about $1 per bushel.

Downstream problems: There's also a surge of Midwestern crops being shipped down the Mississippi River to New Orleans, where they're sold to Europe, South America and elsewhere. That's putting extra strain on growers and exporters in Louisiana.

"Everything is choking up right here on the Mississippi River on the barges and the elevators," Abraham said. "Every elevator that we have is full of soybeans right now and can literally take no more on."