Grain Vessel Loading Activity Remains Strong as Ocean Freight Rates Inch Up
Grain vessel loading activity in the U.S. Gulf and PNW ports has remained relatively strong so far during this last quarter of the year. During October and November, an average of 36 ocean-going grain vessels were loaded per week, while 41 vessels were either loading or waiting to be loaded in the U.S. Gulf. In the PNW, an average of 17 vessels were either loading or waiting to be loaded.
During the previous quarter, a weekly average of 32 vessels were loaded and 28 vessels were loading or waiting to be loaded in the U.S. Gulf. Only 12 vessels were either loading or waiting to be loaded in the PNW during the same period.
Meanwhile, ocean freight rates for shipping bulk grain from the U.S. Gulf to Japan averaged $48.38 per metric ton (mt) during November. The rates from PNW to Japan averaged $26.81 per mt. Both rates were 7 percent higher than third quarter levels. Year-to-date grain inspected for exports at U.S. ports has also remained strong.
CP Showcases New Grain Train
On December 4, Canadian Pacific Railway (CP) unveiled its next generation 8,500-foot “high efficiency product” (HEP) grain train at G3 Canada Limited’s Pasqua elevator facility near Moose Jaw, Saskatchewan. G3 is a Canadian grain handling company. According to the press release, the HEP train can move 44 percent more grain from larger-capacity, shorter-length cars, which means more cars can fit on a train of the same length.
The cars are part of a half-billion-dollar investment to upgrade the fleet. CP will have approximately 500 new hopper cars in service by the end of 2018 and 1,000 by spring 2019. Over the next four years, CP plans to purchase a total of 5,900 new hopper cars.
Wheat Inspections Rebound
Grain News on AgFax
For the week ending November 29, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.61 million metric tons (mmt), down 1 percent from the previous week, 9 percent from last year, and 17 percent below the 3-year average. Total inspections of wheat jumped 64 percent from the previous week, increasing primarily in the Pacific Northwest (PNW) and the Texas Gulf export regions.
Shipments of wheat continued to increase to Asia and Latin America. Compared to the previous week, inspections of corn and soybeans decreased 12 and 7 percent, respectively.
Week-to-week grain inspections in the PNW increased 14 percent, while Mississippi Gulf inspections decreased 2 percent. Outstanding export sales (unshipped) of grain increased for wheat and corn, but were down for soybeans.
Snapshots by Sector
For the week ending November 22, unshipped balances of wheat, corn, and soybeans totaled 28.6 mmt, down 14 percent from the same time last year. Net weekly wheat export sales were .377 mmt, up 14 percent from the previous week. Net corn export sales were 1.27 mmt, up 44 percent from the previous week. Net soybean export sales were .629 mmt, up 8 percent from the past week.
U.S. Class I railroads originated 20,061 grain carloads for the week ending November 24, down 15 percent from the previous week, up 7 percent from last year, and down 4 percent from the 3-year average.
Average December shuttle secondary railcar bids/offers per car were $145 below tariff for the week ending November 29, up $5 from last week. Average non-shuttle secondary railcar bids/offers were $88 above tariff, up $91 from last week. There were no shuttle or non-shuttle bids/offers this week last year.
For the week ending December 1, barge grain movements totaled 670,384 tons, 27 percent lower than the previous week and down 5 percent from the same period last year.
For the week ending December 1, 429 grain barges moved down river, 147 less than the previous week. There were 903 grain barges unloaded in New Orleans, 5 percent higher than the previous week.
For the week ending November 29, 40 ocean-going grain vessels were loaded in the Gulf, 7 percent less than the same period last year. Fifty-seven vessels are expected to be loaded within the next 10 days, 36 percent more than the same period last year.
For the week ending November 29, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $48.00 per metric ton. The cost of shipping, from the PNW to Japan, was $26.25 per metric ton.
For the week ending December 3, the U.S. average diesel fuel price decreased 5.4 cents from the previous week to $3.207 per gallon, 28.5 cents above the same week last year.