Barge Rates Decrease as River Conditions Improve on Upper Mississippi and Ohio Rivers
Navigation has improved on the Upper Mississippi and Ohio Rivers as water levels have dropped or remained steady. River levels on the lower Mississippi River, however, remain high, which has reduced tow sizes and increased transit times. As of April 21, barge freight rates have decreased on the Upper Mississippi and Illinois Rivers 7 to 13 percent, while Ohio River rates decreased 9 percent.
The decrease in rates can be attributed to better navigation conditions and a slight decrease in barge demand as weekly tonnages decreased 3 percent compared to last week. Barge operators have indicated there is a reduced demand for barge services as farmers are busy with fieldwork. As of April 19, corn plantings were 9 percent complete, behind the 5-year average pace of 13 percent.
Bulk Ocean Freight Rates Unchanged for Three Consecutive Weeks
Ocean freight rates for shipping bulk grains have remained low and unchanged over the past three weeks. During the week ending April 17, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $31 per metric ton (mt), which is unchanged from the previous week but 35 percent less than a year earlier. The cost of shipping from the PNW to Japan was $17 per mt, unchanged from the previous week and down 36 percent from a year ago.
Ocean freight rates remained low because of excess supply of bulk vessels and lagging demand for bulk shipping in the market. However, low bulk shipping rates–in addition to low commodity prices–could be an incentive for grain buyers around the globe to increase purchases.
Total Grain Inspections Down but Corn and Wheat Increase
For the week ending April 16, total inspections of grain (corn, wheat, and soybeans) from all major export regions reached 1.76 million metric tons (mmt), down 3 percent from the past week, 22 percent below last year, and 8 percent below the 3-year average. Despite the decrease in total grain inspections, corn (1.05 mmt) and wheat (0.568 mmt) inspections rose 25 and 15 percent from the past week as shipments to Latin America and Asia rebounded.
The increase, however, could not offset the 70 percent drop in soybean inspections. The decrease in U.S. soybean exports is normal this time of the year as the South American grain harvest intensifies. U.S. grain inspections were down 6 percent from the past week in the Mississippi Gulf and Pacific Northwest.
Snapshots by Sector
During the week ending April 9, unshipped balances of wheat, corn, and soybeans totaled 21.6 mmt, 14 percent lower than at the same time last year. Corn export sales reached 0.588 mmt, down 8 percent and wheat export sales of 0.048 mm were down 85 percent from the previous week. Soybean export sales of 0.313 mmt were up noticeably from the previous week.
U.S. railroads originated 23,741 carloads of grain during the week ending April 11, up 14 percent from last week, 14 percent from last year, and 24 percent from the 3-year average.
During the week ending April 16, average May shuttle secondary railcar bids/offers per car were $300 below tariff, down $100 from last week and $1,800 lower than last year. Non-shuttle secondary railcar bids/offers were $100 below tariff, down $67 from last week and $2,600 lower than last year.
During the week ending April 18, barge grain movements totaled 694,292 tons–about 3 percent lower than the previous week and 2 percent lower than the same period last year.
During the week ending April 18, 433 grain barges moved down river, down 3 percent from last week; 436 grain barges were unloaded in New Orleans, down 15 percent from the previous week.
During the week ending April 16, 29 ocean-going grain vessels were loaded in the Gulf, 41 percent less than the same period last year. Fifty-eight vessels are expected to be loaded within the next 10 days, 45 percent more than the same period last year.
Fuel During the week April 20, U.S. diesel fuel prices averaged $2.78 per gallon, 3 cents higher than the previous week. They were down $1.19 from the same week last year.