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Moving Grain: Dec. Stocks Highest in 30 Years; Weather Continues to Disrupt River Traffic

Ernst Undesser
From USDA January 18, 2018

Moving Grain: Dec. Stocks Highest in 30 Years; Weather Continues to Disrupt River Traffic

©Debra L Ferguson Stock Images

December Grain Stocks: Highest in Past 30 Years

Among the many USDA reports published last week (including the January World Agricultural Supply and Demand Estimates report and the latest monthly World Markets and Trade reports from the Foreign Agricultural Service), USDA’s National Agricultural Statistics Service (NASS) released its 2017 Crop Production Annual Summary and January Grain Stocks report, as well as the annual Winter Wheat and Canola Seedings last week.

According to NASS, U.S. grain stocks of corn, soybeans, and wheat—as of December 1, 2017—totaled17.5 billion bushels, which is up 1 percent, despite production of these crops falling 5 percent from 2016. It is the highest December level of stocks in the past 30 years. High grain stocks could sustain grain movements in coming months, as grain is brought out of storage and used for feed, exports, and other uses.

Notably, December 1 stocks of corn, soybeans, and wheat were up 6 percent in Illinois and 17 percent in Missouri, but down 5 percent each in North Dakota and South Dakota. Changes of these magnitures for these important grain States may affect the distribution pattern of movements compared to last year.

Weather Conditions Continue to Disrupt River Traffic

Since late December, ice accumulations on the Mississippi, Ohio, and Illinois Rivers have disrupted barge logistics, and weekly tonnages have been significantly reduced. For the first two weeks of January, grain barge tonnages were 496 thousand tons, 63 percent lower than the same period last year. Low water and ice are slowing traffic on the Mississippi River in the St. Louis area, especially where heavy ice buildup around locks are not allowing lock gates to fully open.

Ice buildup on much of the Illinois River has slowed traffic and reduced the number of upbound empty barges to 10 for the week ending January 13. Last year during the same time period, 180 upbound empty barges were shipped up the Illinois River.

Navigation conditions on the lower Ohio River have improved with minimal delays occurring at Locks and Dam 52, while the upper Ohio River has faced less favorable navigation conditions where ice and high water have caused traffic disruptions.

Wheat and Soybeans Boost Total Grain Inspections

For the week ending January 11, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.26 million metric tons (mmt), up 72 percent from the previous week, down 20 percent from the same time last year, and 12 percent below the 3-year average. Inspections increased for each of the three major grains, with wheat and soybeans jumping 369 and 77 percent, from the previous week, respectively.

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Export demand for grain increased primarily from Asia and Africa. Pacific Northwest (PNW) inspections increased 140 percent from the past week, and grain inspections in the Mississippi Gulf increased 45 percent for the same period. Outstanding (unshipped) export sales of corn, wheat, and soybeans were down from the previous week.

Snapshots by Sector

Export Sales

For the week ending January 4, unshipped balances of wheat, corn, and soybeans totaled 32.9 mmt, down 17 percent from the same time last year. Net weekly wheat export sales were .071 mmt, down 46 percent from the previous week. Net corn export sales were .438 mmt, up 337 percent from the previous week, and net soybean export sales were .607 mmt for the same period, up 81 percent from the previous week.

Rail

U.S. Class I railroads originated 19,638 grain carloads for the week ending January 6, up 25 percent from the previous week, down 9 percent from last year, and down 11 percent from the 3-year average.

Average January shuttle secondary railcar bids/offers per car were $275 above tariff for the week ending January 11, up $50 from last week, and $850 lower than last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending January 13, barge grain movements totaled 284,620 tons, 35 percent higher than the previous week, and down 59 percent from the same period last year.

For the week ending January 13, 176 grain barges moved down river, up 25 percent from last week, 747 grain barges were unloaded in New Orleans, 8 percent lower than the previous week.

Ocean

For the week ending January 11, 36 ocean-going grain vessels were loaded in the Gulf, 16 percent less than the same period last year. Fifty-nine vessels are expected to be loaded within the next 10 days, 32 percent less than the same period last year.

For the week ending January 11, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $44.75 per metric ton. The cost of shipping from the PNW to Japan was $24.50 per metric ton.

Fuel

During the week ending January 15, average diesel fuel prices increased 3 cents from the previous week at $3.03 per gallon, 44 cents above the same week last year.

Full report.

Ernst Undesser
From USDA January 18, 2018