Total Inspections of Grain Rebound and Remain Well Above-Average in PNW
For the week ending June 8, total inspections of grain (corn, wheat, and soybeans) for export from major U.S. export regions reached 2.4 million metric tons (mmt), up 18 percent from the previous week, up 2 percent from the same time last year, and 39 percent above the 3-year average.
Total inspections rebounded primarily due to sizeable increases in inspections of wheat and soybeans. Inspections of corn inspections, however, were down 12 percent from the previous week as shipments to Asia decreased.
Mississippi Gulf grain inspections jumped 31 percent from the previous week, while PNW grain inspections increased 8 percent. PNW grain inspections have been well above-average for several weeks, even reaching levels comparable to the Mississippi Gulf recently.
Ocean Freight Rates Continue to Fall
As of June 9, 2017, the ocean freight rate for shipping bulk grains from the U.S. Gulf to Japan was $36 per metric ton (mt)—a 3 percent drop over the past 2 weeks and 13 percent below the year-to-date peak of $40.50 per mt on April 20. The rate for shipping bulk grains from the Pacific Northwest (PNW) to Japan was $18 per mt—a 5 percent decline over the past 2 weeks and 19 percent below the year-to-date peak of $22.25 per mt on April 13.
The bulk shipping market could not sustain the rally that occurred during the early part of the year, as excess vessel supply persists amid lagging demand for moving bulk materials, including grains.
AgTC Annual Meeting Sheds Light on Agricultural Export Challenges
AMS staff attended the Agriculture Transportation Coalition’s 29th Annual Meeting in Long Beach, CA, last week. Topics of interest included the new structure of the ocean container carrier alliances and its impact on rates and vessel service, availability and quality of chassis pools, container terminal productivity, and others.
The meeting brings together agricultural exporters from all major commodity groups including, grains and soybeans, cotton, fruits, vegetables, nuts, and meat products. More information about the meeting will be provided in an upcoming Grain Transportation Report feature article.
Snapshots by Sector
For the week ending June 1, unshipped balances of wheat, corn, and soybeans totaled 24.6 mmt, down 4 percent from the same time last year. Net weekly wheat export sales were at .461 mmt for the new marketing year, up noticeably from the previous week. Net corn export sales were .349 mmt, down 15 percent from the previous week, and net soybean export sales were .159 mmt, down 74 percent from the past week.
U.S. Class I railroads originated 22,838 grain carloads for the week ending June 3, down 8 percent from the previous week, up 22 percent from last year, and up 21 percent from the 3-year average.
Average June shuttle secondary railcar bids/offers per car were $180 below tariff for the week ending June 8, down $134 from last week, and $201 lower than last year. Average non-shuttle secondary railcar bids/offers per car were $67 below tariff, up $11 from last week, and $17 lower than last year.
For the week ending June 10, barge grain movements totaled 727,954 tons, 24 percent lower than the last week, and down 19 percent from the same period last year.
For the week ending June 10, 462 grain barges moved down river, down 25 percent from last week, 534 grain barges were unloaded in New Orleans, up 14 percent from the previous week.
For the week ending June 8, 32 ocean-going grain vessels were loaded in the Gulf, 14 percent less than the same period last year. Fifty-five vessels are expected to be loaded within the next 10 days, 17 percent more than the same period last year.
For the week ending June 8, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $36 per metric ton, 1 percent less than the previous week. The cost of shipping from the PNW to Japan was $18 per metric ton, 3 percent less than the previous week.
During the week ending June 12, average diesel fuel prices decreased 4 cents from the previous week at $2.52 per gallon, 9 cents higher than the same week last year.