Some Improvement in River Conditions
Weather in the nation’s mid-section continues to remain relatively dry, which has allowed the river levels on the upper Mississippi River and its tributaries to fall. However, river levels in the southern section of the lower Mississippi River have yet to crest.
As of January 13, the parts of the lower Illinois River are closed, but barges are being loading on the upper Illinois River in anticipation of a short closure on the lower Illinois River. The Mississippi River in the St. Louis, MO area is open with restricted tow sizes and minimum horsepower requirements.
The river level on the lower Mississippi River at Donaldsonville, LA, located above New Orleans, LA, is expected to crest on January 20. On January 10, the U.S. Army Corps of Engineers opened the Bonnet Carré Spillway, located above New Orleans, to keep river levels at New Orleans from rising further by diverting water out of the Mississippi River into Lake Pontchartrain.
STB Releases CP/NS Merger Correspondence
The Surface Transporation Board (STB) posted correspondence on its website late last week from various lawmakers, shippers, and trade groups regarding talks of a proposed merger between two Class I railroads, Canadian Pacific (CP), and Norfolk Southern (NS).
CP sent an initial offer letter to Norfolk Southern on November 9, 2015. Since then, CP has made two subsequent offers to the NS management, and the NS board has unanimously rejected all three offers. In response to the third rejection, CP said it “will review its strategic alternatives.”
NS expressed particular concern over the regulatory uncertainties and hurdles associated with railroad mergers. In a January 7 letter sent to Congress, the STB pointed out that the newest merger rules “take a much more cautious approach.”
Wheat Inspections Continue to Increase
For the week ending January 7, total inspections of wheat for export from all major export regions continued to rise, reaching .414 million metric tons (mmt), up 13 percent from the past week and 71 percent above the same time last year.
Wheat inspections were also 23 percent above the 3-year average. Inspections of wheat increased primarily in the Mississippi Gulf, however, Pacific Northwest wheat inspections accounted for 72 percent of total wheat inspections at all ports.
Total corn inspections jumped 70 percent from the previous week, but soybean inspections dropped 17 percent as shipments to Asia continued to fall.
Total inspections of grain (corn, wheat, soybeans) for export from all major export regions reached 2.27 mmt, unchanged from the past week, 2 percent above last year, and 10 percent above the 3-year average. Outstanding export sales for the past week were down for wheat, corn, and soybeans.
Snapshots by Sector
During the week ending December 31, unshipped balances of wheat, corn, and soybeans totaled 26.4 mmt, down 20 percent from the same time last year.
Net weekly wheat export sales of .077 mmt were down 78 percent from the previous week. Net corn export sales were .253 mmt, down 64 percent from the previous week, and net soybean export sales of 0.639 mmt, up 34 percent from the past week.
U.S. Class I railroads originated 18,586 carloads of grain for the week ending January 2, up 2 percent from the previous week, down 19 percent from last year, and down 8 percent from the 3-year average.
Average January shuttle secondary railcar bids/offers per car were $104 below tariff for the week ending January 7, up $19 from last week, and $246 higher than last year. Non-shuttle secondary railcar bids/offers were $75 below tariff, up $8 from last week, and 109 lower than last year.
For the week ending January 9, barge grain movements totaled 433,647 tons, 23 percent higher than last week, and down 25 percent from the same period last year.
For the week ending January 9, 262 grain barges moved down river, up 24 percent from last week; 802 grain barges were unloaded in New Orleans, up 24 percent from the previous week.
For the week ending January 7, 35 ocean-going grain vessels were loaded in the Gulf, 14.6 percent less than the same period last year. Fifty-nine vessels are expected to be loaded within the next 10 days, 14.5 percent less than the same period last year.
For the week ending January 7, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $25.25 per metric ton (mt), unchanged from the previous week. The cost of shipping from the PNW to Japan was $14.00 per mt, unchanged from the previous week.
During the week ending January 11, U.S. average diesel fuel prices decreased 3 cents from the previous week to $2.18 per gallon– down $0.88 from the same week last year.