Barge Rates Fall as Navigation Conditions Improve
As of October 10, spot barge rates for export grain from major originating locations decreased 41 to 65 percent compared to the previous week. After surging to 3-year highs by October 3, rates plunged as rains replenished river channels and allowed for increased loading capacities and higher cargo moving efficiencies.
GTR Figure 8 shows the Illinois River Barge rate increasing from 435 percent of tariff ($20.18 per ton) in mid-September to a October 3rd peak of 775 percent of tariff ($35.96 per ton), and a sharp decline to 413 percent of tariff ($19.16 per ton) by October 10. However, the increased water levels may have a negative impact on rates as the lower Ohio River is closed due to high water.
Water levels on the lower Ohio River are exceeding the maximum allowable stage for transiting Ohio River Locks and Dam (L&D) 52. The dam at L&D 52 is not fully functional and cannot allow for a quicker drawdown of the river levels. It may take until October 16 for locking to resume.
Nate Spares New Orleans-Baton Rouge and Brings Beneficial Rains for Inland Navigation
Hurricane Nate developed late last week in the western Caribbean and moved quickly through the Gulf of Mexico. The storm made landfall as a category 1 hurricane near the mouth of the Mississippi River late October 7 and again near Biloxi, MS, early October 8. On October 6, the U.S. Coast Guard (USCG) shut down vessel operations from New Orleans to Baton Rouge on the Mississippi River as well as ports as far east as the Florida panhandle in preparation for the storm.
The storm had little impact on the Mississippi River port infrastructure so the USCG reopened the ship channel on the afternoon of October 8. Further east, the Ports of Mobile, AL, Gulfport and Pascagoula, MS, and Pensacola, FL, sustained minimal terminal damage and the USCG slowly reopened ship channels, however, some vessel draft restrictions are in place.
As the storm remnants moved North, it provided rain in the South and Ohio River Valley that will help give the Ohio River and Lower Mississippi River a much needed increase in river levels.
Grain News on AgFax
Grain Inspections Decrease but Soybeans Rebound
For the week ending October 5, total inspections of grain (corn, wheat, and soybeans) for export from major U.S. export regions reached 2.44 million metric tons (mmt), down 3 percent from the previous week, down 31 percent from the same time last year, and 2 percent below the 3-year average.
Although inspections of soybeans jumped 66 percent from the previous week, the increase did not offset the decreases in inspections of wheat and corn. Pacific Northwest (PNW) inspections decreased 14 percent from the past week while Mississippi Gulf inspections increased 4 percent from the previous week. Outstanding (unshipped) export sales were up slightly from the previous week for soybeans, but down for wheat and corn.
Snapshots by Sector
For the week ending September 28, unshipped balances of wheat, corn, and soybeans totaled 32.9 mmt, down 23 percent from the same time last year. Net weekly wheat export sales were .492 mmt, up 13 percent from the previous week. Net corn export sales were .814 mmt, up 154 percent from the previous week, and net soybean export sales were 1 mmt for the same period, down 67 percent from the previous week.
Containerized grain exports to Asia in July were just over 31,000 twenty-foot equivalent unit, 33.7 percent lower than the previous year, 35 percent lower than the 5-year average, and 20.7 percent lower than June movements.
U.S. Class I railroads originated 23,630 grain carloads for the week ending September 30, up 20 percent from the previous week, down 14 percent from last year, and up 2 percent from the 3-year average.
Average October shuttle secondary railcar bids/offers per car were $308 above tariff for the week ending October 5, up $23 from last week, and $483 lower than last year. Average non-shuttle secondary railcar bids/offers per car were $36 below tariff, down $68 from last week, and $157 lower than last year.
For the week ending October 7, barge grain movements totaled 595,874 tons, 27 percent lower than the previous week, and down 6 percent from the same period last year.
For the week ending October 7, 382 grain barges moved down river, down 28 percent from last week. 671 grain barges were unloaded in New Orleans, down 7 percent from the previous week.
For the week ending October 5, 35 ocean-going grain vessels were loaded in the Gulf, 27 percent less than the same period last year. Sixty-four vessels are expected to be loaded within the next 10 days, 17 percent less than the same period last year.
For the week ending October 5, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $41.50 per metric ton, 2 percent less than the previous week. The cost of shipping from the PNW to Japan was $23.00 per metric ton, 2 percent less than the previous week.
During the week ending October 9, average diesel fuel prices decreased 2 cents from the previous week at $2.78 per gallon, 33 cents above the same week last year.