Panama Canal Announces Second Draft Restrictions
Subsequent to the restrictions announced on March 1 (see 03/24/16 Grain Transportaion Report), the Panama Canal Authority announced a second round of draft restrictions on April 1 that will be imposed on vessels transiting the canal, effective April 29, 2016. The restrictions are temporary and preventive measures to mitigate the effects of anticipated climatic variability related to El Niño.
The maximum authorized transit draft is set at 11.74 meters (38.5 feet). The restrictions will be waived for vessels loaded over 11.74 meters (38.5 feet), on or before April 1. Vessels loaded after April 1, shall comply with the new draft limit. Depending on the level of Gatum Lake at the time of transit, vessels may be required to trim or off-load cargo if they are over 11.74 meters (38.5) in draft.
As was previously done, draft restrictions will be implemented in 15-centimeter (6-inch) decrements at a time, with each restriction announced at least 4 weeks in advance. For more information, see here.
U.S. Corn Growers Expect a Major Increase in 2016 Acreage
According to USDA’s National Agricultural Statistics Service (NASS) March 31, 2016 Prospective Plantings, growers intend to plant 93.6 million acres of corn this year. This is expected to be the first increase in corn planted acreage since 2012 and, if realized, will be the third largest corn acreage since 1944. NASS reports that growers are expecting higher returns for corn during 2016 compared with other crops.
Corn growers in 41 of the 48 contiguous States expect to either maintain or increase the number of acres they plant to corn. In contrast, U.S. soybean growers expect to reverse the trends of recent year’s record crops. In 2016, growers expect to plant 82.2 million acres to soybeans, a less than 1 percent decrease from 2015.
With the possibility of an increase in corn supply, transportation suppliers are likely anticipating an increased demand for services during this year’s harvest.
Grain Inspections Lowest Since September Last Year
For the week ending March 31, total inspections of grain (corn, wheat, soybeans) for export from all major export regions reached 1.59 million metric tons (mmt), down 18 percent from the past week, down 21 from last year, and 18 percent below the 3-year average. Inspections of grain were the lowest since September 2015.
Soybean inspections dropped 64 percent from the previous week, as shipments to Asia decreased significantly.
Wheat inspections decreased 10 percent from the past week, but corn inspections increased 7 percent as demand remained steady.
Pacific Northwest (PNW) grain inspections increased 11 percent from the past week, but Mississippi Gulf grain inspections dropped 32 percent. Outstanding export sales (unshipped) of grain were down for each of the three major grains.
Snapshots by Sector
During the week ending March 24, unshipped balances of wheat, corn, and soybeans totaled 19.7 mmt, down 17 percent from the same time last year. Net weekly wheat export sales of .317 mmt were down 14 percent from the previous week. Net corn export sales were .791 mmt, down 1 percent from the previous week, and net soybean export sales were .272 mmt, down 34 percent from the past week.
U.S. Class I railroads originated 19,144 grain carloads for the week ending March 26, down 11 percent from the previous week, down 16 percent from last year, and down 5 percent from the 3-year average. Average April shuttle secondary railcar bids/offers per car were $217 below tariff for the week ending March 31, down $42 from last week, and $167 lower than last year.
Non-shuttle secondary railcar bids/offers were $0 and $88 higher than last year. There were no non-shuttle bids/offers last week.
For the week ending April 2, barge grain movements totaled 611,040 tons, 22 percent lower than last week, and down 13 percent from the same period last year. For the week ending April 2, 383 grain barges moved down river, down 23 percent from last week; 525 grain barges were unloaded in New Orleans, up 8 percent from the previous week.
For the week ending March 31, 33 ocean-going grain vessels were loaded in the Gulf, 10 percent more than the same period last year. Forty-seven vessels are expected to be loaded within the next 10 days, 22 percent less than the same period last year.
For the week ending March 31, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $23.50 per metric ton, up 2 percent 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 April 4, U.S. average diesel fuel prices fell less than 1cent from the previous week to remain at $2.12 per gallon—down $0.67 from the same week last year.