High Water May Impend Recent Surge in Grain Barge Shipments
For the week ending June 21, grain barge tonnages on the locking portions of the Mississippi, Ohio, and Arkansas rivers were 1.1 million tons, continuing a three-week trend of tonnages exceeding 1 million tons per week.
The recent surge has occurred as operating conditions have improved on most segments of the system, along with an increased demand for export corn. However, high water conditions are reoccurring on some parts of the Upper Mississippi and Illinois rivers, which might disrupt grain shipments.
Year-to-date tonnages have been about 8 percent lower than last year and 1 percent lower than the 3-year average for the comparable time period.
Weekly Grain Inspections Recede
For the week ending June 21, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.4 million metric tons, down 17 percent from the previous week, up 21 percent from last year, and 25 percent above the 3-year average.
Inspections of each of the three major grains were down from the past week, with soybean inspections dropping 37 percent due to smaller shipments to Europe. Total grain inspections in the Pacific Northwest (PNW) decreased 9 percent from week to week, while Mississippi Gulf inspections decreased 26 percent.
Despite the decreases, year-to-date inspections of grain are equal to the same time last year, and inspections during the last four weeks have remained strong. Outstanding export sales are up for wheat, but are down for corn and soybeans.
Diesel Prices Decreased for Fifth Consecutive Week
The average retail price of diesel decreased for a fifth consecutive week. Average prices decreased 7 cents—from $3.29 per gallon for the week ending May 28 to $3.22 in the week ending June 25—the lowest point in the past seven weeks. Nonetheless, diesel remains more expensive, at 75 cents per gallon, compared to the same period last year.
Grain News on AgFax
According to the latest Short-Term Energy Outlook by the Energy Information Agency (EIA), U.S. crude oil production averaged 10.7 million barrels per day in May, up 700,000 barrels from the daily average in 2017. EIA also reported the consumption of U.S. distillates, like diesel, was 4.0 million barrels per day in the same month—the highest for the month since 2007.
Further, EIA said retail prices may fluctuate in accordance with oil futures due to recovering inventories, increased U.S. diesel demand, and a recent announcement by the Organization of the Petroleum Exporting Countries to revamp production by 52 percent by July 1st. Crude oil prices represented 50 percent of the price paid at the pump in May.
Snapshots by Sector
For the week ending June 14, unshipped balances of wheat, corn, and soybeans totaled 26.7 mmt, up 18 percent from the same time last year. Net weekly wheat export sales were .462 mmt, up 53 percent from the previous week. Net corn export sales were .166 mmt, down 82 percent from the previous week. Net soybean export sales were .302 mmt, down 42 percent from the previous week.
U.S. Class I railroads originated 23,086 grain carloads for the week ending June 16, down 1 percent from the previous week, up 6 percent from last year, and 7 percent above the 3-year average.
Average July shuttle secondary railcar bids/offers per car were $317 above tariff for the week ending June 21, up $33 from last week, and $473 higher than last year. There were no non-shuttle bids/offers this week.
For the week ending June 23, barge grain movements totaled 1,069,484 tons, 10 percent lower than the previous week and up 33 percent from the same period last year.
For the week ending June 23, 730 grain barges moved down river, 29 barges less than the previous week. There were 806 grain barges unloaded in New Orleans, 31 percent higher than the previous week.
For the week ending June 21, 29 ocean-going grain vessels were loaded in the Gulf, 9 percent less than the same period last year. Forty-six vessels are expected to be loaded within the next 10 days, 2 percent more than the same period last year.
For the week ending June 21, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $43.50 per metric ton, 1 percent less than the previous week. The cost of shipping from the PNW to Japan was $24.75 per metric ton, 1 percent less than the previous week.