Flooding Conditions Still Impacting Barge Traffic on Upper Mississippi River
As of October 17, rain in the central U.S. caused flooding that closed 7 locks on the upper Mississippi River. The closure affects a 184-mile stretch, from Muscatine, IA, to Clarksville, MO. Down-bound grain traffic continues on the open sections of the Mississippi, Ohio, and Arkansas Rivers. However, barge grain tonnages are down 22 percent for the first two weeks of October, compared to the 3-year average for the same period.
While weather conditions have slowed traffic, barge operators say the reduction in tonnage is mainly due to reduced demand for soybeans. During the first half of October, soybean barge tonnages are down 59 percent, compared to the 3-year average. Corn barge shippers are using barge capacity normally used by soybean shippers. Corn barge tonnages during the first half of October are up 52 percent compared to the 3-year average.
Forecasts from the National Weather Service indicate a complete reopening of the river may not occur until the week of October 22.
PierPass 2.0 Looming for Ports of Los Angeles and Long Beach
In a public announcement on October 15, the West Coast Maritime Terminal Operators Agreement said PierPass 2.0 will go into effect on November 19, 2018, subject to the conclusion of applicable Federal Maritime Commission (FMC) procedures. PierPass 2.0—the newest PierPass program—will reduce per container fees at the Ports of Los Angeles and Long Beach by more than half.
However, all shipments will be subject to the fees instead of shipments only moved during daytime gate hours. Since the program requires coordination of all 12 terminals at the port complex, a review by the FMC is required. The terminal operators filed for an amendment to their agreement in April to implement PierPass 2.0; and industry comments have been received since then.
FMC has requested additional documentation from the terminal operators and has until November 19 to take action, otherwise the program will go into effect automatically. The Los Angeles and Long Beach Port Complex moves more than 50 percent of containerized grain exports.
Soybean Inspections Highest Since February
Grain News on AgFax
For the week ending October 11, total inspections of grain (corn, wheat, and soybeans), for export from all major U.S. export regions, reached 2.67 million metric tons (mmt), up 9 percent from the previous week, up 7 percent from last year, and unchanged from the 3-year average. Total grain inspections increased primarily due to a rebound in soybean inspections, which jumped 95 percent from the previous week.
Soybean inspections were the highest since February, and increased mainly due to increased shipments to Latin America and Europe. Wheat inspections increased 1 percent, but corn inspections dropped 28 percent from the previous week, as demand from Asia declined.
Inspections of grain for the Mississippi Gulf increased 33 percent from the previous week, but Pacific Northwest inspections decreased 13 percent.
Snapshots by Sector
For the week ending October 4, unshipped balances of wheat, corn, and soybeans totaled 35.8 mmt, up 4 percent from the same time last year. Net weekly wheat export sales were .339 mmt, down 32 percent from the previous week. Net corn export sales were 1 mmt, down 30 percent from the previous week. Net soybean export sales were .440 mmt, down 79 percent from the past week.
U.S. Class I railroads originated 22,641 grain carloads for the week ending October 6; up 4 percent from the previous week, down 8 percent from last year, and 11 percent from the 3-year average.
Average October shuttle secondary railcar bids/offers per car were $100 below tariff for the week ending October 11, down $154 from last week, and $488 lower than last year. There were no non-shuttle secondary railcar bids/offers this week.
For the week ending October 13, barge grain movements totaled 516,508 tons, 5 percent lower than the previous week and up 6 percent from the same period last year.
For the week ending October 13, 331 grain barges moved down river, 9 barges less than the previous week. There were 896 grain barges unloaded in New Orleans, 12 percent higher than the previous week.
For the week ending October 11, 39 ocean-going grain vessels were loaded in the Gulf, 26 percent more than the same period last year. Sixty-four vessels are expected to be loaded within the next 10 days, 5 percent more than the same period last year.
For the week ending October 11, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $49.50 per metric ton, 4 percent more than the previous week. The cost of shipping, from the PNW to Japan, was $27.75 per metric ton, 4 percent more than the previous week.
For the week ending October 15, the U.S. average diesel fuel price increased 0.9 cents, from the previous week, to $3.394 per gallon, 60.7 cents above the same week last year.