Grain Barge Rates Decline as River Conditions Improve
Navigation conditions on the Upper Mississippi and Ohio Rivers continue to improve as water levels have dropped since reaching the highest year-to-date levels during the first half of April. The higher water levels and faster currents reduced barge efficiencies by reducing tow sizes and slowing transit times. Since April 14, barge rates for export grain have declined for 3 straight weeks.
St. Louis to Gulf barge rates dropped from 373 percent of tariff ($14.88 per ton) to 273 percent of tariff ($10.89 per ton) by May 5, but are still higher than the 5-year average of 258 percent of tariff ($10.29 per ton) for the month of May. Year-to-date tonnages on the locking portions of the Mississippi, Ohio, and Arkansas River are 11 percent higher than the 5-year average.
Grain Inspections Recede; Lowest Since August
For the week ending April 30, total inspections of grain (corn, wheat, and soybeans) from all major export regions reached 1.55 mmt, down 30 percent from the past week, down 18 percent from last year, and 9 percent below the 3-year average. Grain inspections were the lowest since early August of last year. Inspections of each of the three major grains were down from the past week, as were inspections in each of the major export regions. Inspections of grain during the last four weeks were 20 percent below last year but 6 percent above the 3-year average.
Weekly Grain Export Sales Mixed
For the week ending April 23, net weekly export sales were strong for corn and soybeans, but some wheat sales were canceled. Net weekly corn export sales reached 0.833 million metric tons (mmt), down 4 percent from the previous week but 33 percent higher than the prior 4-week average, with highest sales reported to Japan, Saudi Arabia, and Mexico. Soybean export sales of 0.433 mmt were up significantly from the previous week and from the prior 4-week average, with highest sales reported to China and other Asian destinations.
As the wheat marketing year draws to a close by the end of May, wheat export sales had a net reduction of 0.449 mmt from the previous week, making this week a marketing-year-low level. Most of the cancelations were reported for a variety of destinations, including Asia and Central America.
Unshipped balances of wheat, corn, and soybeans totaled 19.9 mmt, 13 percent lower than at the same time last year.
Snapshots by Sector
U.S. railroads originated 19,909 carloads of grain during the week ending April 25, up 10 percent from last week, down 9 percent from last year, and 4 percent higher than the 3-year average.
During the week ending April 30, average May shuttle secondary railcar bids/offers per car were $200 below tariff, up $100 from last week and $738 lower than last year. Non-shuttle secondary railcar bids/offers were $125 below tariff, up $13 from last week and $825 lower than last year.
During the week ending May 2, barge grain movements totaled 849,706 tons–about 24 percent higher than the previous week and 8 percent higher than the same period last year.
During the week ending May 2, 540 grain barges moved down river, up 25 percent from last week; 582 grain barges were unloaded in New Orleans, down 11 percent from the previous week.
During the week ending April 30, 35 ocean-going grain vessels were loaded in the Gulf, 3 percent less than the same period last year. Fifty-six vessels are expected to be loaded within the next 10 days, 19 percent more than the same period last year.
During the week ending May 1, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $30.75 per metric ton (mt), 1 percent less than the previous week. The cost of shipping from the PNW to Japan was $17 per mt, unchanged from the previous week.
During the week May 4, U.S. diesel fuel prices averaged $2.85 per gallon, 4 cents higher than the previous week. They were down $1.11 from the same week last year.