Upper Mississippi and Illinois River Returning to Normal Operations
As of November 12, high water levels on the Upper Mississippi and Illinois rivers are decreasing and barge traffic is returning to normal operations. There have been recent increases in soybean barge shipments despite reduced export demand from China and poor navigating conditions. For the week ending November 10, soybean shipments on the locking portions of the Mississippi, Ohio, and Arkansas rivers were 547 thousand tons; 43 percent higher compared to the previous week, and the highest weekly total for soybeans since late November 2017.
Time is a factor for end of calendar barge shipments, as the Upper Mississippi River at Lock and Dam 20, at Canton, MO will be closed for repair work on December 15. It will re-open on March 5, 2019. The closure will halt barge traffic from Iowa, northwest Illinois, Wisconsin, and Minnesota for the winter.
USDA Study on Infrastructure and Transportation Costs on U.S. Soybean Market Share
USDA-AMS recently published a study, “The Impact of Infrastructure and Transportation Costs on U.S. Soybean Market Share: An Updated Analysis from 1992-2017.” The report examines new transportation routes that have emerged in Brazil and updates previous data and analysis. Although the United States produces the largest volume of soybeans in the world, the U.S. market share of soybean world trade has declined from 66 percent in 1992 to 40 percent in 2017.
Results suggest the U.S. world market share could decline an additional 12 percentage points assuming there are no significant improvements in U.S. transportation infrastructure serving the soybean supply chain, from farm to port. A decline of 1 percent in the U.S. soybean market share is equivalent to more than half a billion dollars lost in export sales.
High BNSF Grain and Overall Traffic Volumes
In a November 9 customer bulletin, BNSF Railway (BNSF) announced it was moving the heaviest traffic volume of the year. The week ending November 3 marked the eighth consecutive week of rail traffic above 200,000 units. In addition, BNSF grain carloadings over the past four weeks were 5 percent higher than the same period last year.
Year-to-date BNSF grain carloadings are also 5 percent above last year—the biggest year-to-year increase of any Class I Railroad. BNSF’s announcement also highlighted its cold-weather preparations and assurance to keep freight traffic moving across its network throughout the winter season.
Grain Inspections Down Slightly
For the week ending November 8, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.82 million metric tons (mmt); down 3 percent from the previous week, 5 percent from last year, and 18 percent from the 3-year average. Total corn inspections decreased 12 percent from the previous week, but soybean inspections increased 5 percent. Total wheat inspections, however, were unchanged from the past week.
Grain inspections in the Mississippi Gulf decreased 7 percent from the past week, but Pacific Northwest (PNW) grain inspections increased 7 percent from week to week. Outstanding export sales (unshipped) of grain are up for wheat, but down for corn and soybeans.
Snapshots by Sector
For the week ending November 1, unshipped balances of wheat, corn, and soybeans totaled 30.3 mmt, down 16 percent from the same time last year. Net weekly wheat export sales were .661 mmt, up 13 percent from the previous week. Net corn export sales were .701 mmt, up 77 percent from the previous week. Net soybean export sales were .388 mmt, down 2 percent from the past week.
U.S. Class I railroads originated 20,441 grain carloads for the week ending November 3; down 12 percent from the previous week, 12 percent from last year, and 20 percent from the 3-year average.
Average November shuttle secondary railcar bids/offers per car were $250 below tariff for the week ending November 8, down $50 from last week, and $75 lower than last year. Average non-shuttle secondary railcar bids/offers were $0, unchanged from last week. There were no non-shuttle bids/offers this week last year.
For the week ending November 10, barge grain movements totaled 973,427 tons, 14 percent higher than the previous week and down 12 percent from the same period last year.
For the week ending November 10, 622 grain barges moved down river, 82 more than the previous week. There were 766 grain barges unloaded in New Orleans, 13 percent lower than the previous week.
For the week ending November 8, 35 ocean-going grain vessels were loaded in the Gulf, 13 percent less than the same period last year. Fifty-three vessels are expected to be loaded within the next 10 days, 6 percent more than the same period last year.
For the week ending November 8, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $48.50 per metric ton, 1 percent less than the previous week. The cost of shipping, from the PNW to Japan, was $27.00 per metric ton, 1 percent less than the previous week.
For the week ending November 12, the U.S. average diesel fuel price decreased 2.1 cents, from the previous week, to $3.317 per gallon, 40.2 cents above the same week last year.