For the week ending December 4, total inspections of grain (corn, wheat, soybeans) from all major export regions reached 3 million metric tons (mmt), down 5 percent from the past week, down 4 percent from last year, but 20 percent above the 3-year average.
The decrease was caused primarily by a 30 percent drop in week to week corn inspections.
Despite the drop in total grain inspected, soybean inspections (2.2 mmt) increased 4 percent from the past week. Pacific Northwest (PNW) soybean inspections jumped 56 percent from the previous week as shipments to Asia rebounded. Total grain inspections in the PNW increased 47 percent from the past week.
USDA Raises the Forecast of Soybean Exports
In its December World Agricultural Supply and Demand Estimates report, USDA raised its forecast of the 2014/15 marketing year soybean exports to 1.76 billion bushels, up 40 million bushels from the November forecast and 113 million bushels more than last year.
The new forecast reflects the record export pace in recent weeks and prospects for additional sales and shipments ahead of the South American harvest. With production and other demand unchanged, soybean ending stocks are projected at 410 million bushels, down 40 million bushels from last year, but still the highest since 2006/07.
USDA did not change its projected average farm prices, leaving it in the range of $9 to $11 per bushel. For the week ending December 6, soybeans represented 62 percent of the downbound grain barge tonnages, while corn shipments were 37 percent of the grain tonnages. Based on the 5-year average, soybeans are typically 50 percent and corn is 47 percent of the total downbound barge tonnages during the fourth quarter.
Year-to-date, total grain moved on locking portion of the river system was 32.6 million tons, 17 percent higher than the five year average.
Diesel Prices Continue to Fall Despite Brief Disruption
During the week ending December 8, diesel fuel prices fell 7 cents per gallon and a total of 14 cents over the past 4 weeks.
Continued strong crude oil supplies in the United States and a report from OPEC that production will remain steady have encouraged diesel prices to continue the downward trend. The trend was disrupted briefly the week of November 10 mainly due to an increase in prices in the Midwest.
The Energy Information Administration reports that inventories in the Midwest region typically draw down quite steeply in autumn, but this year’s decrease was particularly pronounced due to the coincident timing of a large harvest, planned refinery maintenance and unplanned disruptions to refinery operations.
EIA also reported with the harvest mostly complete, and refinery utilization rates returning to higher levels, inventories are increasing — as of November 28, Midwest distillate inventories were 23.7 million bbl.
Snapshots by Sector
- Export Sales During the week ending November 27, unshipped balances of wheat, corn, and soybeans totaled 37.7 mmt, down 13 percent from the same time last year. Corn weekly net export sales reached 1.17 m mt, up 2 4 percent from the last week; wheat — 319,200 mt, down 26 percent; and soybeans — 1.18 m mt, down 16 percent from last week, but 5 percent above the prior 4-week average.
- Rail U.S. railroads originated 20,221 carloads of grain during the week ending November 29, down 11 percent from last week, down 2 percent from last year, and 6 percent higher than the 3-year average. During the week ending December 4, average December non-shuttle secondary railcar bids/offers per car were $225 above tariff, the same as last week and $263 lower than last year. Average shuttle bids/offers per car were $38 below tariff, up $25 from last week and $1,600 lower than last year.
- Barge During the week ending December 6 barge grain movements totaled 854,026 tons — 7.8 percent lower than the previous week but 11 percent higher than the same period last year. During the week ending December 6,551 grain barges moved down river, down 7.6 percent from last week; 777 grain barges were unloaded in New Orleans, down 15 percent from the previous week.
- Ocean During the week ending December 4, 49 ocean-going grain vessels were loaded in the Gulf, 8.9 percent more than the same period last year. Seventy three vessels are expected to be loaded within the next 10 days, 5.8 percent more than the same period last year. During the week ending December 5, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $42.50 per mt, down 2 percent from the previous week. The cost of shipping from the PNW to Japan was $23 per mt, down 4 percent from the previous week.