For the week ending October 30, inspections of soybeans from all major export regions reached a record 2.83 million metric tons (mmt), up 25 percent from the past week and 30 percent above the same time last year.
Soybean inspections accounted for 82 percent of total grain inspections and were shipped primarily to China. Inspections of soybeans jumped 31 percent in the Mississippi Gulf, to a record 1.58 mmt. Inspections of corn, however, continued to fall, decreasing 42 percent from the previous week. The December futures contract prices remained lower than the March contract prices, causing producers to store more of the newly-harvested corn than soybeans.
Soybeans November futures contract prices were above the January contract prices, indicating strong near-term demand.
Wheat inspections were down 4 percent from the past week. Total inspections of grain (corn, wheat, soybeans) totaled 3.46 mmt, up 8 percent from the past week, up 8 percent from last year, and 33 percent above the 3-year average.
Grain Barge Movements Above Average
As of November 1, year-to-date grain barge tonnages are 13 percent higher than the 5-year average and the highest since 2010. Current river conditions are adequate for navigation but a drop in levels may cause shoaling situations where dredging is needed. At present, there are dredging delays at Mississippi River Locks 27 (near St. Louis).
Dredging is being conducted nightly with limited passage at Locks 27 during dredging operations. Dredging operations are expected to be completed by November 9.
Barge rates remain above average in early November, with the highest rates in the Mississippi River Locks 15 area, near Davenport, IA, where rates are about $46.71 per ton for export bound grain (70 percent higher than the 5-year average).
USDA Files Comments with STB on Railroad Revenue Adequacy
On November 4, USDA filed reply comments with the Surface Transportation Board (STB) recommending that railroads’ ability to charge higher prices to shippers without competitive alternatives (captive shippers) should be lessened in an environment where railroads are revenue adequate.
While railroads serving competitive traffic can price those services as the market allows, USDA believes captive shippers, many of which are grain shippers, deserve additional protection against the market power of revenue-adequate railroads.
In the comments, USDA said one way to accomplish this goal is through developing simplified rate challenge procedures that factor in whether the railroad is revenue-adequate.
Negotiations Lead to Work Slowdowns at West Coast Ports
After nearly 6 months of ongoing negotiations, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have yet to agree to a new labor contract for the nearly 20,000 dockworkers at 26 ports along the U.S. West Coast.
On Monday, the PMA announced the ILWU had initiated orchestrated slowdowns at the Pacific Northwest ports of Seattle and Tacoma, severely impacting many of the largest terminals during the peak holiday shipping season. Without a new contract in place or an extension of the old contract, there are no grievance procedures in place to address the slowdowns. West Coast ports handle approximately 75 percent of containerized grain exports, and 10 percent flow through Seattle and Tacoma.
Snapshots by Sector
- Rail U.S. railroads originated 22,361 carloads of grain during the week ending October 25, up 2 percent from last week, down 11 percent from last year, and 2 percent above the 3-year average. During the week ending October 30, average November non-shuttle secondary railcar bids/offers per car were $1,100 above tariff, up $300 from last week and $192 higher than last year. Average shuttle bids/offers per car were $975 above tariff, down $917 f rom last week and $721 lower than last year.
- Barge During the week ending November 1 barge grain movements totaled 838,470 tons–13.8 percent higher than the previous week but 2 percent lower than the same period last year. During the week ending November 1, 536 grain barges moved down river , up 13.6 percent from last week; 882 grain barges were unloaded in New Orleans, up 2.8 percent from the previous week.
- Ocean During the week ending October 30, 45 ocean-going grain vessels were loaded in the Gulf, 2 percent more than the same period last year. Sixty-five vessels are expected to be loaded within the next 10 days, 18 percent less than the same period last year. During the week ending October 31, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $46 per mt, unchanged from the previous week. The cost of shipping from the PNW to Japan was $25.50 per mt, up 4 percent from the previous week.
- Fuel During the week ending November 3, U.S. average diesel fuel prices decreased 1 cent from the previous week to $3.62 per gallon– down 23 cents from the same week last year.