Slower Pace of Grain Barge Tonnages Drags Down Barge Freight Rates
As of November 3, year-to-date (YTD) grain barge tonnages, on the locking portions of the Mississippi, Ohio, and Arkansas rivers, were 31.7 million tons, 7 percent lower than last year.
Significantly reduced demand from China and poor navigation conditions have contributed to the reduction in the volumes of barged grain. Year-To-Date corn barge shipments were up 5 percent compared to last year. However, this was not enough to offset the 20 percent decline in YTD soybean shipments, resulting in lower overall demand for barge services.
As of November 6, barge spot rates from major interior shipping locations were 16 to 28 percent lower than the 5-year average.
Corn Inspections Push Total Grain Exports Higher
For the week ending November 1, total inspections of grain (corn, wheat, and soybeans), for export from all major U.S. export regions, reached 2.84 million metric tons (mmt); up 15 percent from the previous week, down 13 percent from last year, and down 17 percent from the 3-year average. Grain inspections increased as corn inspections jumped 80 percent from the previous week.
Corn inspections increased to destinations in Asia and Latin America. Soybean and wheat inspections, however, were down 7 and 17 percent, respectively, from the previous week. Compared to last week, grain inspections increased 40 percent in the Mississippi Gulf but decreased 13 percent in the Pacific Northwest.
Diesel Fuel Prices Drop for Third Consecutive Week
During the week ending November 5, U.S. on-highway diesel fuel prices decreased 1.7 cents per gallon to $3.338. Prices have decreased 5.6 cents over the past 3 weeks, partially reclaiming the accumulated 18.7 cents increase in September and much of October. The Energy Information Administration reported, crude oil spot prices averaged $81 per barrel (b) in October, up $2/b from September. Despite the increase in monthly average prices, spot prices declined from $85/b on October 1 to $75/b on October 31, relieving pressure on diesel fuel prices.
Snapshots by Sector
For the week ending October 25, unshipped balances of wheat, corn, and soybeans totaled 31.4 mmt, down 10 percent from the same time last year. Net weekly wheat export sales were .583 mmt, up 32 percent from the previous week. Net corn export sales were .395 mmt, up 13 percent from the previous week. Net soybean export sales were .396 mmt, down 86 percent from the past week.
U.S. Class I railroads originated 23,285 grain carloads for the week ending October 27; up 4 percent from the previous week, up 3 percent from last year, and down 4 percent from the 3-year average.
Average November shuttle secondary railcar bids/offers per car were $200 below tariff for the week ending November 1, down $225 from last week, and $45 higher than last year. Average non-shuttle secondary railcar bids/offers were $0, down $13 from last week, and $6 higher than last year.
For the week ending November 3, barge grain movements totaled 857,677 tons, 115 percent higher than the previous week and down 11 percent from the same period last year.
For the week ending November 3, 540 grain barges moved down river, 298 more than the previous week. There were 878 grain barges unloaded in New Orleans, 29 percent higher than the previous week.
For the week ending November 1, 38 ocean-going grain vessels were loaded in the Gulf, 15 percent more than the same period last year. Fifty-five vessels are expected to be loaded within the next 10 days, unchanged from the same period last year.
For the week ending November 1, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $49.00 per metric ton, 1 percent less than the previous week. The cost of shipping, from the PNW to Japan, was $27.25 per metric ton, 1 percent less than the previous week.