Grain Barges Rates Remain Below Average for First Quarter
As of March 29, barge rates for export grain from major interior origins are between 29 to 57 percent below the 5-year average. Barge operators have indicated a continued weakened demand for barge services that began late October- early November. As of March 29, St. Louis export grain barge rates were 210 percent of tariff ($8.38 per ton), 44 percent lower than the 5-year average of 302 percent of tariff ($12.05 per ton).
Barge rates did see a rally during the last 2 weeks as barge supply was adjusting to more traffic to the open portions of the Upper Mississippi River that was closed during the winter. In addition, rain-induced high water conditions on the lower Mississippi River restricted tow sizes, slowed barge logistics for river export facilities, which also contributed to increased barge rates.
St. Lawrence Seaway Open
The St. Lawrence Seaway opened last week for its 58th season. Extending 2,340 miles, the Great Lakes St. Lawrence Seaway System is an avenue to connect northern U.S. shippers to international markets. Dominant commodities moving through the locks and channels include iron ore, coal, limestone, and grain. In 2015, 2.2 million tons of grain (44 percent wheat, 22 percent corn, and 33 percent soybeans) were inspected for export in ports on the Great Lakes, about the same volume as 2014 (Table 16).
Grain Inspections Down but Above Last Year
For the week ending March 24, total inspections of grain (corn, wheat, soybeans) for export from all major export regions reached 1.9 million metric tons (mmt), down 9 percent from the past week, up 8 from last year, and 5 percent below the 3-year average. Wheat inspections dropped 30 percent from the previous week as shipments to Africa and Latin America receded. Inspections of corn and soybeans decreased only 2 percent from the past week.
Pacific Northwest (PNW) grain inspections decreased 7 percent from the past week, and Mississippi Gulf grain inspections dropped 3 percent. During the last 4 weeks, however, total inspections of grain were 7 percent above last year and 6 percent above the 3-year average. Outstanding export sales (unshipped) of grain were up slightly for wheat but down for corn and soybeans.
Snapshots by Sector
During the week ending March 17, unshipped balances of wheat, corn, and soybeans totaled 20.3 mmt, down 19 percent from the same time last year. Net weekly wheat export sales of .369 mmt were up 73 percent from the previous week. Net corn export sales were .803 mmt, down 35 percent from the previous week, and net soybean export sales were .411 mmt, down 34 percent from the past week.
U.S. Class I railroads originated 21,494 grain carloads for the week ending March 19, down 1 percent from the previous week, down 11 percent from last year, and up 9 percent from the 3-year average. Average April shuttle secondary railcar bids/offers per car were $175 below tariff for the week ending March 24, up $31 from last week, and $110 lower than last year. There were no non-shuttle secondary railcar bids/offers this week.
For the week ending March 26, barge grain movements totaled 779,706 tons, 52 percent higher than last week, and up 25 percent from the same period last year. For the week ending March 26, 500 grain barges moved down river, up 53 percent from last week; 485 grain barges were unloaded in New Orleans, down 16 percent from the previous week.
For the week ending March 24, 38 ocean-going grain vessels were loaded in the Gulf, 3 percent more than the same period last year. Forty-four vessels are expected to be loaded within the next 10 days, 19 percent less than the same period last year. For the week ending March 24, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $23.00 per metric ton, unchanged from the previous week. The cost of shipping from the PNW to Japan was $14.00 per metric ton, unchanged from the previous week.
During the week ending March 28, U.S. average diesel fuel prices were unchanged from the previous week at $2.12 per gallon, down $0.70 from the same week last year.