As Upper Mississippi River Begins to Close, Empty Grain Barges Head Up Ohio River
For the week ending November 25, 534 grain barges passed downbound on the locking sections of the Mississippi, Ohio, and Arkansas Rivers, for a total tonnage of 1.2 million tons. About 84 percent of the barges were from the Upper Mississippi and Illinois Rivers. This is typical for this time of year, as barges depart from the northern most reaches of the soon-to-be-closed Upper Mississippi River because of winter ice.
Traffic from the Ohio River has been hampered during most of November due to high water and repair work at Ohio River Locks and Dam 52 that has caused delays for downbound grain barges and the return of upbound empty barges. While repairs are still underway, traffic has improved during late November.
For the first half of November, upbound empty barges averaged only 170 per week, while during the second half of November, upbound empties averaged 343 per week. As of November 28, barge rates increased 15 percent on the lower Ohio River and 30 percent on the upper Ohio River compared to last week.
Corn Inspections Flat, while Soybean Inspections Continue to Decline
For the week ending November 23, total grain export inspections (for corn, wheat, and soybeans) from all major U.S. export regions fell to 2.65 million metric tons (mmt), down 19 percent from the previous week, down 22 percent from the same time last year, and down 23 percent from the 3-year average.
Soybean inspections accounted for the majority of the decline, falling 29 percent from last week. At the same time, corn inspections fell 3 percent, while wheat inspections rose 32 percent. Both corn and soybean inspections have been low in recent weeks this year compared to previous years, but the week-over-week changes are in line with seasonal trends.
Corn inspections generally rise through the end of the year, with the exception of holiday weeks, which may account for some of the decline in inspections this week and will likely impact inspections next week as well.
Grain News on AgFax
China’s Activities Driving Dry Bulk Rates
Ocean rates for shipping bulk commodities, including grains, have increased since the beginning of the year due to strong coal, and iron ore imports by China. As of November 16, the ocean rate for shipping grain from the U.S. Gulf to Japan was $42.25 per metric ton (mt)—up 21 percent from the beginning of the year. The rate from the Pacific Northwest (PNW) to Japan was $24.00 per mt—35 percent more than the beginning of the year.
China imported about 19 percent more seaborne coal and 7 percent more iron ore during the first 9 and 8 months of the year, respectively. This amounts to import demand growth of 79 million tons for year-to-date cargo as compared to the same period from the previous year. Chinese iron ore imports exceeded a record 100 million tons in September for the first time.
However, a projected 3 percent growth in fleet size and impending holidays may slow the rate of increase in freight rates during December and the early part of 2018.
Snapshots by Sector
For the week ending November 16, unshipped balances of wheat, corn, and soybeans totaled 34.8 mmt, down 19 percent from the same time last year. Net weekly wheat export sales were .200 mmt, down 59 percent from the previous week. Net corn export sales were 1.08 mmt, up 15 percent from the previous week, and net soybean export sales were .869 mmt for the same period, down 21 percent from the previous week.
U.S. Class I railroads originated 21,926 grain carloads for the week ending November 18, down 4 percent from the previous week, down 15 percent from last year, and down 7 percent from the 3-year average.
Average December shuttle secondary railcar bids/offers per car were $119 below tariff for the week ending November 23, down $28 from last week, and $67 lower than last year. There were no non-shuttle bids/offers this week.
For the week ending November 25, barge grain movements totaled 1,177,660 tons, 34 percent higher than the previous week, and down 6 percent from the same period last year.
For the week ending November 25, 744 grain barges moved down river, up 34 percent from last week. 870 grain barges were unloaded in New Orleans, 16 percent lower than the previous week.
For the week ending November 23, 35 ocean-going grain vessels were loaded in the Gulf, 31 percent less than the same period last year. Forty-nine vessels are expected to be loaded within the next 10 days, 38 percent less than the same period last year.
During the week ending November 27, average diesel fuel prices increased one cent from the previous week at $2.93 per gallon, 51 cents above the same week last year.