For the week ending March 27, total inspections of corn for export from all major port regions reached 1.3 million metric tons (mmt), up 18 percent from the past week, up 161 percent from last year, and 105 percent above the 3-year average.
Corn inspections were also the highest since August 26, 2010. Higher corn stocks and increased demand from Asia and Latin America helped boost corn inspections.
Wheat inspections (.497 mmt) were down 11 percent from the previous week, and soybean inspections dropped 32 percent for the same period, as shipments to Asia decreased. Total inspections of grain (corn, wheat, and soybeans) reached 2.32 mmt, down 4 percent from the past week, up 42 percent from the same time last year, and 14 percent above the 3-year average.
Outstanding export sales increased for corn but decreased for wheat and soybeans.
Improved Navigation Conditions Reduce Grain Barge Rates
Grain barge rates have been dropping for three weeks as navigation conditions have improved on the Illinois River, the Mississippi River in the St. Louis area, and on the Ohio River.
A reduction in ice accumulations and adequate river levels have reduced costs to barge operators. In addition, over the last three weeks (March 9-29), an average of 363 empty barges per week have transited upbound at Mississippi River Locks 27 (near St. Louis, MO), a significant increase compared to January to early March when upbound empties averaged 137 barges per week.
As a result of these factors, current St. Louis barge rates for export grain were 300 percent of tariff ($11.97 per ton), 50 percent lower than the peak winter rate of 595 percent of tariff ($23.74 per ton) that occurred in early March.
Slowdown in Chinese Iron Ore, Soybean Imports Reduced Ocean Freight Rates
For the week ending March 28, the ocean freight rate for shipping bulk grains from the U.S. Gulf to Japan , at $51.50 per metric ton (mt), has declined by 11 percent since the week ending January 3. The rate from the Pacific Northwest to Japan, at $28 per mt, has declined by 5 percent. The reduction in ocean freight rates is caused in part by excess vessel tonnage due to reduced iron ore imports by China and less-than-expected demand for South American soybeans.
There is also speculation in the market of possible Chinese cancellations of Brazilian soybeans, which may further depress rates.
STB Announces Hearing on Rail Service Problems
On April 1, the Surface Transportation Board (STB) announced it is holding a public hearing on April 10 in Washington D.C. to address recent service problems on the rail network.
Service problems have been reported for agricultural, coal, passenger, and other traffic. Railroad executives from BNSF Railway and Canadian Pacific have been directed to appear at the hearing to discuss ongoing and future efforts to improve service and provide a timeline for when service levels return to normal. Other Class I railroads have also been invited to participate.
The STB is encouraging impacted shippers to appear at the hearing to discuss their service concerns and comment on the railroads’ plans. Any interested person wishing to participate should file a notice of intent to participate with the STB by April 7.
Snapshots by Sector
- Rail U.S. railroads originated 19,745 carloads of grain during the week ending March 22, down 6 percent from last week, up 16 percent from last year, and down 4 percent from the 3-year average. During the week ending March 27 , average April non-shuttle secondary railcar bids/offers per car were $1,875 above tariff, unchanged from last week and $1,880 higher than last year. Average shuttle secondary railcar bids/offers per car were $2,537.50 above tariff, up $379 from last week and $2,687.50 higher than last year .
- Barge During the week ending March 29, barge grain movements totaled 806,266 tons — 24.7 percent higher than the previous week and 123.3 percent higher than the same period last year. During the week ending March 29 , 495 grain barges moved down river, up 27.2 percent from last week; 761 grain barges were unloaded in New Orleans, up 0.5 percent from the previous week.
- Ocean During the week ending March 27, 44 ocean-going grain vessels were loaded in the Gulf, 57 percent more than the same period last year. Sixty-two vessels are expected to be loaded within the next 10 days, 38 percent more than the same period last year . During the week ending March 28, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $51.50 per mt, down 3 percent from the previous week. The cost of shipping from the Pacific Northwest to Japan was $28 per mt, down 3 percent from the previous week.
- Fuel During the week ending March 31 , U.S. average diesel fuel prices decreased 1 cent from the previous week to $3.98 per gallon — down 2 cents from the same week last year.