White House Launches Initiatives To Combat Fuel Prices
For the week ending October 24, the U.S average diesel fuel price continued to rise for the third week in a row. At $5.341 per gallon, the price was up 2 cents from the previous week and up $1.628 from the same week a year ago.
To neutralize rising fuel prices, the White House announced three key initiatives. First, the Department of Energy (DOE) will release 15 million barrels of oil from the Strategic Petroleum Reserve (SPR) for December delivery. This action fulfills the President’s intention in March of releasing up to 180 million barrels of SPR crude oil for sale.
As further movement against high prices, the Administration intends to repurchase crude oil for the SPR when prices are at or below $67-$72 per barrel. The repurchase should increase certainty around future crude oil demand and spur production today. Finally, the President is calling on companies to pass on lower energy costs to consumers immediately.
Barge Rates on the Rise Again
For the week of October 25, the St. Louis barge spot rate increased almost 22 percent from last week to $88.46 per ton. However, this rate is lower than the all-time peak of $105.85 per ton for the week of October 11. Because of low water levels on the Mississippi River System (MRS), barge companies have little capacity in the spot market as they struggle to meet current commitments.
Future rates are also higher than normal: the current low barge availability, combined with new export sales of soybeans’;, have spurred demand for barges in November, December, and early next year. The St. Louis 1-month-rate (for November) reached $58.61 per ton, 384 percent higher than last year and 439 percent higher than the 5-year average.
The St. Louis 3-month-rate (for January) reached $33.99 per ton, 265 percent higher than last year and 270 percent higher than the 5-year average. In the near term, barge challenges and draft restrictions are likely to continue. However, by mid-November, the slightly above-normal rain forecast may begin to provide relief and help stabilize some portions of the MRS.
USDA To Discontinue Dataset on Rail Deliveries to Port
After the November 10 GTR, USDA will discontinue publication of its rail deliveries to port (rail-to-port) data. Railroads, grain elevators, and ports have voluntarily provided the data weekly for over 40 years. However, over time, a number of reporting entities have stopped providing data, and others have indicated a desire to cease reporting in the near future.
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Thus, USDA will no longer be able to provide these data. This week’s GTR feature article discusses two data sources that closely approximate the discontinued data: grain inspections from USDA’s Federal Grain Inspection Service (available in the GTR and on USDA’s AgTransport) and grain shuttle turn data from the Surface Transportation Board (available on AgTransport).
FMCSA Ends Hours-of-Service Waiver for Feed and Fuel
The Federal Motor Carrier Safety Administration (FMCSA) has canceled its waiver on hours-of-service (HOS) requirements for trucks transporting feed, fuel, propane, and ethanol. After the waiver was first issued in 2020 to help address the national COVID-19 emergency, FMCSA extended the waiver more than 10 times, sometimes modifying it. Based on comments received during the most recent extension period through October 15, FMCSA decided to let the waiver expire
Snapshots by Sector
Export Sales
For the week ending October 13, unshipped balances of wheat, corn, and soybeans for marketing year 2022/23 totaled 39.43 million metric tons (mmt), down 24 percent from the same time last year and up 1 percent from last week.
Net corn export sales for marketing year 2022/23 were 0.408 mmt, up significantly from last week. Net soybean export sales were 2.336 mmt, up significantly from last week. Net weekly wheat export sales were 0.163 mmt, down 23 percent from last week.
Rail
U.S. Class I railroads originated 25,843 grain carloads during the week ending October 15. This was a 10-percent increase from the previous week, 3 percent more than last year, and 8 percent more than the 3-year average.
Average November shuttle secondary railcar bids/offers (per car) were $1,589 above tariff for the week ending October 20. This was $111 less than last week and $1,304 more than this week last year.
Barge
For the week ending October 22, barged grain movements totaled 525,722 tons. This was 18 percent fewer than the previous week and 9 percent fewer than the same period last year.
For the week ending October 22, 365 grain barges moved down river—49 fewer barges than last week. There were 851 grain barges unloaded in the New Orleans region, 19 percent more than last week.
Ocean
For the week ending October 20, 28 oceangoing grain vessels were loaded in the Gulf—33 percent fewer than the same period last year. Within the next 10 days (starting October 21), 37 vessels were expected to be loaded—28 percent fewer than the same period last year.
As of October 20, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $63.25. This was 1 percent less than the previous week. The rate from the Pacific Northwest to Japan was $37.00 per mt, unchanged from the previous week.
