Ocean Freight Rates Fell Amid Low Trading Activity
Ocean freight rates for shipping bulk grain have fallen for the last 3 consecutive weeks. As of January 27, 2022, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $62.50—11 percent less than this year’s first available rate on January 6.
The Pacific Northwest-to-Japan rate was $34.50—11 percent less than on January 6. The dip in the ocean rates reflects the typical seasonal dip in vessel demand amid various holidays. According to the January 20, 2022, Transportation and Export report, from O’Neil Commodity Consulting, the Dry Bulk Index—reflecting average prices paid for transporting dry bulk materials—is down 70 percent from February 2021.
The dip in vessel demand and ocean rates is expected to persist, with the Chinese Lunar Year, at least into the first week of February. As of January 27, 2022, an average of 35 vessels were loaded per week in the U.S. Gulf, compared to 42 during the same period in 2021.
USDA Helps Expand Port of Oakland’s Capacity for Agricultural Exporters
On January 31, 2022, the USDA Secretary announced USDA’s partnership with the Port of Oakland to set up a 25-acre “pop-up” container yard near the port. The new container yard will give agricultural exporters easier access to empty containers (both refrigerated and dry containers).
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Recent port congestion and record demand for import container service have complicated access to empty containers. Besides helping set up the additional space, USDA will help agricultural exporters cover—at $125 per container—the extra logistical costs of using the new yard.
Enhancing the marketing of U.S. agricultural products, the new yard will facilitate several logistical improvements, including better access to available equipment; fewer unpredictable congestion surcharges for trucks; and quicker pickup of empty containers (because the main terminal is bypassed).
Nine Midwest States Agree To Increase Truck Weights To Speed Disaster Relief
The State Departments of Transportation comprising the Mid America Association of State Transportation Officials (MASTO) formed an agreement to increase interstate truck weights during major disasters declared by the U.S. President. The action is intended to expedite the movement of emergency supplies across State lines.
The MASTO-member States (all in the Midwest) identified acceptable emergency divisible load truck weights for disasters. The policy increases the base-level emergency interstate truck weights for MASTO States from 80,000 pounds to 88,000 pounds (no more than a 10-percent increase per axle), though individual States may allow heavier weights.
Nine key grain-producing States—Illinois, Indiana, Iowa, Kansas, Minnesota, Michigan, Missouri, Ohio, and Wisconsin—signed MASTO’s memorandum of understanding. These States accounted for over 66 percent of total U.S. corn and soybean production in 2021.
Snapshots by Sector
For the week ending January 20, unshipped balances of wheat, corn, and soybeans for marketing year 2021/22 totaled 39.8. million metric tons (mmt), down 17 percent from the same time last year, and down 1 percent from the previous week.
Net corn export sales were 1.402 mmt, up 29 percent from the previous week. Net soybean export sales were 1.026 mmt, up 53 percent from the previous week. Net weekly wheat export sales were 0.677 mmt, up 78 percent from the previous week.
U.S. Class I railroads originated 23,259 grain carloads during the week ending January 22. This was a 4-percent decrease from the previous week, 15 percent fewer than last year, and 3 percent lower than the 3-year average.
Average February shuttle secondary railcar bids/offers (per car) were $1,156 above tariff for the week ending January 27. This was $102 less than last week and $1,057 more than this week last year. There were no non-shuttle bids/offers this week.
For the week ending January 29, barged grain movements totaled 489,344 tons. This was 37 percent lower than the previous week and 52 percent less than the same period last year.
For the week ending January 29, 300 grain barges moved down river—162 fewer barges than the previous week. There were 742 grain barges unloaded in the New Orleans Region, 9 percent fewer than last week.
For the week ending January 27, 37 oceangoing grain vessels were loaded in the Gulf—unchanged from the same period last year. Within the next 10 days (starting January 28), 52 vessels were expected to be loaded—20 percent fewer than the same period last year.
As of January 27, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $62.50. This was 3 percent less than the previous week. The rate from the Pacific Northwest to Japan was $34.50 per mt, 1 percent less than the previous week.
For the week ending January 31, the U.S. average diesel fuel price increased 6.6 cents from the previous week to $3.846 per gallon, 110.8 cents above the same week last year. At $3.714 per gallon, the average Midwest diesel price increased 23.7 cents in the past 4 weeks.