Moving Grains: High Water Continues to Disrupt River Traffic

High Water Continues to Disrupt Grain Shipping

Heavy rains in the central U.S. continue to raise water levels, which has halted most traffic on the Illinois River and slowed traffic on the Mississippi River at St. Louis. High Illinois River levels have prevented a majority of grain facilities from loading onto barges. Barge operators are not quoting rates for Illinois River barge services until most loading facilities are operational, which will occur sometime after the expected June 25 crest.

Barge operators have limited operations in the St. Louis area partly due to accumulations of flood-caused debris that can damage towboats and barges. In addition, tows of barges greater than 600 feet are restricted to daylight only passage while the St. Louis gage is greater than 25 feet. As of June 24, the St. Louis gage was 36.6 feet and dropping, and is not forecast to be lower than 25 feet until July 4. However, year-to-date barge shipments are 15 percent above the 5-year average.

TEMCO Grain Export Facility Completes Upgrades

On June 16, elected officials and management of TEMCO terminal in Kalama, Washington celebrated the completion of a two-year construction project expanding the capacity of the terminal to 6 million metric tons of grains and oilseeds annually. This is an increase of nearly three-times the previous capacity. The terminal would perform cleaning, storing, and transferring of commodities by rail and barge to oceangoing vessels.

The jointly owned CHS Inc. and Cargill grain terminal will increase the number of ship calls from 50 to 135 each year, decrease loading times, increase local jobs and also provide customers greater access to high-demand Pacific Rim markets. The facility is eventually expected to increase its share of world wheat exports, which have been falling in the last few year years due to increasing world wheat production.

Maritime Summit between EU, US and China Boosts Cooperation

The Federal Maritime Commission reported that on June 18, representatives from the maritime regulatory authorities of the European Union, the People’s Republic of China and the United States met in Brussels to discuss antitrust and regulatory issues in maritime transport. The discussions focused on the global trend towards increased cooperation in the liner shipping market, as well as on regulatory and policy issues related to ports.

With the continued growth in scope of carriers’ cooperation, the authorities considered that monitoring of the sector warrants ever closer contact and better communication between competition and regulatory authorities. Delegates also discussed their respective enforcement activities and highlighted each authority’s priority issues such as port congestion.

Snapshots by Sector

Export Sales

During the week ending June 11, unshipped balances of wheat, corn, and soybeans totaled 18.4 mmt, 1 percent lower than at the same time last year. Net weekly wheat export sales of 0.316 mmt were down 16 percent from the prior week. Corn export sales of 0.627 mmt were up 27 percent, and soybean export sales of 0.133 mmt were down 19 percent from the prior week.

Rail

U.S. railroads originated 20,189 carloads of grain during the week ending June 13, up 12 percent from last week, 0.6 percent from last year, and 11 percent from the 3-year average.

During the week ending June 18, average July shuttle secondary railcar bids/offers per car were $216 below tariff, up $72 from last week and $853 lower than last year. Non-shuttle secondary railcar bids/offers were $38 below tariff, down $38 from last week and $438 lower than last year.

Barge

During the week ending June 20, barge grain movements totaled 676,450 tons–about 22 percent lower than the previous week and 17 percent lower than the same period last year.

During the week ending June 20, 447 grain barges moved down river, down 21 percent from last week; 591 grain barges were unloaded in New Orleans, down 5 percent from the previous week.

Ocean

During the week ending June 18, 33 ocean-going grain vessels were loaded in the Gulf, 3 percent more than the same period last year. Forty-seven vessels are expected to be loaded within the next 10 days, 47 percent more than the same period last year.

During the week ending June 19, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $32.50 per metric ton (mt), up 5 percent from the previous week. The cost of shipping from the PNW to Japan was $18.50 per mt, up 7 percent from the previous week.

Fuel

During the week ending June 22, U.S. average diesel fuel prices decreased 1 cents from the previous week to $2.86 per gallon–down $1.06 from the same week last year.

Full report.


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