Moving Grain: River Navigation Conditions Improve

©Debra L Ferguson Stock Photography

Navigation Conditions Improve, Barge Spot Rates Decline

After several weeks of flooding, river levels on the Mississippi and Ohio rivers are receding and thus easing some navigational issues for barge operators in many locations. For the week ending on March 17, total barge grain shipments through Mississippi River Locks 27 increased 133 percent (594 thousand tons) from the average of the previous three weeks when high water conditions began.

Similarly, barge grain shipments through Ohio River Locks 52 increased 177 percent (209 thousand tons). Nevertheless, there is still some congestion and delayed transit times on the lower Ohio River, as well as at Cairo, IL, where the Ohio River flows into the Mississippi River. Southbound barge traffic on stretches of the lower Mississippi River continues to be restricted to daylight hours with reduced tow sizes.

As of March 20, barge spot rates for export grain dropped 10 to 24 percent, compared to the previous week at major originating locations.

Soybean Inspections Lowest Since July 2017

For the week ending March 15, total inspections of grain (corn, wheat, and soybeans) for export, from all major U.S. export regions, reached 2.37 million metric tons (mmt); down 15 percent from the previous week, down 15 percent from last year, and 2 percent below the 3-year average. The decrease in total grain inspections was driven by a 47 percent drop in soybean inspections.

Soybean inspections were the lowest, since late July of last year, with shipments down primarily to Asia. Inspections of wheat and corn increased slightly from the previous week. Pacific Northwest (PNW) grain inspections decreased 28 percent from the previous week, but Mississippi Gulf inspections increased 4 percent.

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Current outstanding (unshipped) export sales were up for corn and soybeans, but down for wheat.

U.S. Crude Oil Production and Global Petroleum Inventories Up in 2018

The Energy Information Agency (EIA) reported, in its Short Term Energy Outlook, that crude oil production in February averaged 10.3 million barrels per day—230,000 more barrels per day than the previous month. EIA reported U.S. crude oil production at 9.3 million barrels per day, in 2017.

In 2018, EIA projects U.S. crude oil production will average 10.7 million barrels per day highest annual average of daily production in history. While global petroleum inventories declined by 0.6 million barrels per day in 2017, EIA estimates inventories will grow by about 0.4 million barrels per day in 2018.

Snapshots by Sector

Export Sales

For the week ending March 8, unshipped balances of wheat, corn, and soybeans totaled 37.6 mmt, up 17 percent from the same time last year. Net weekly wheat export sales were .163 mmt, down 58 percent from the previous week. Net corn export sales were 2.51 mmt, up 35 percent from the previous week. Net soybean export sales totaled 1.27 mmt, down 49 percent from the previous week.

Rail

U.S. Class I railroads originated 22,995 grain carloads, for the week ending March 10; down 1 percent from the previous week and 5 percent from last year, but up 3 percent from the 3-year average.

Average April shuttle secondary railcar bids/offers, per car, were $238 above tariff, for the week ending March 15, down $8 from last week, and $434 higher than last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending March 17, barge grain movements totaled 838,866 tons, 133 percent higher than the previous week and down 4 percent from the same period last year.

For the week ending March 17, 537 grain barges moved down river, 284 barges more than the previous week. There were 569 grain barges unloaded in New Orleans, 21 percent lower than the previous week.

Ocean

For the week ending March 15, 37 ocean-going grain vessels were loaded in the Gulf, 16 percent less than the same period last year. Sixty-two vessels are expected to be loaded within the next 10 days, 15 percent less than the same period last year.

For the week ending March 15, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $45.25 per metric ton, up 1 percent from the previous week. The cost of shipping from the PNW to Japan was $24.50 per metric ton, up 2 percent from the previous week.

Fuel

During the week ending March 19, average diesel fuel prices was $2.97 per gallon, unchanged from the previous week but 43 cents higher than the same week last year.

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