Notice to Our Readers on Incomplete Data
Due to our staff being on furlough because of the recent partial government shutdown, some GTR datasets are incomplete in this week’s report. We plan to have all datasets updated, including historical datasets, in next week’s report. This week’s Table 4 has been modified to include weekly carloading data from the past five weeks, because the data is only distributed in PDF reports Incomplete datasets in this week’s report include tables 12, 13, 14 and 15. We appreciate your patience.
Illinois River Traffic Hampered by Cold Weather
Historic cold weather throughout the Midwest has caused significant ice accumulations on the Illinois River, making navigation difficult in some locations. As of January 29, American Commercial Barge Line (ACBL) reports that most marine operations on the Illinois River have stopped due to low temperatures and ice buildup.
ACBL has observed that the lack of continuous barge traffic on the Illinois River is causing the channels to freeze back over prior to the next towboat arriving through the impacted channels. The Illinois River is typically open most of the winter, except under the most severe conditions. Before the drastic cold temperatures, down-bound grain movements at Illinois River La Grange Lock and Dam were 704 thousand tons for the first 4 weeks of 2019, 10 percent higher than the 5-year average.
There have been considerable increases in corn and wheat shipments at La Grange, however, soybean tonnages have decreased.
Ocean Freight Rates Continue Downward Slide
Ocean freight rates for shipping bulk grains have been falling from their 2018 peak levels reached during the beginning of fourth quarter. As of January 24, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $41.00 per metric ton compared to $49.75 per mt during October 18, 2018—18 percent less. As of January 24, the cost of shipping, from the PNW to Japan, was $23.00 per metric ton, compared to $27.75 during October 18—17 percent less.
Similar trends were observed on the routes from the U.S. Gulf and PNW to China. According to January 24, 2019 Transportation and Export Report by O’Neil Commodity Consulting, the market needs more cargo demand or an increase in vessel scrapings to clear the existing excess vessel supply in the market.
Weekly Grain Inspection Down; Total 2018 Inspections Slightly Above 2017
Grain News on AgFax
For the week ending January 24, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.24 million metric tons (mmt), down 22 percent from the previous week, down 18 percent from last year, and 5 percent below the 3-year average. Inspections of each of the three major grains were down from the previous week, with wheat dropping 31 percent; corn down 21 percent; and soybeans down 18 percent.
Pacific Northwest (PNW) grain inspections decreased 13 percent from the previous week, and Mississippi Gulf inspections decreased 18 percent for the same period. Year-to-date grain inspections for the new year are down 9 percent, but corn inspections have remained fairly strong.
Last year, annual grain inspections ended the year slightly above 2017 despite a sizeable decrease in soybean inspections.
Snapshots by Sector
U.S. Class I railroads originated 22,913 grain carloads for the week ending January 19, down 7 percent from the previous week, 2 percent from last year, and 4 percent from the 3-year average.
Average February shuttle secondary railcar bids/offers per car were $99 below tariff for the week ending January 24, up $5 from last week, and down $294 from last year. Average non-shuttle secondary railcar bids/offers per car were $92 above tariff, down $8 from last week. There were no non-shuttle bids/offers this week last year.
For the week ending January 26, barge grain movements totaled 456,762 tons, 22 percent lower than the previous week and down 14 percent from the same period last year.
For the week ending January 26, 271 grain barges moved down river, 81 barges less than the previous week. There were 821 grain barges unloaded in New Orleans, 17 percent higher than the previous week.
For the week ending January 24, 35 ocean-going grain vessels were loaded in the Gulf, 6 percent more than the same period last year. Fifty-four vessels are expected to be loaded within the next 10 days, 2 percent less than the same period last year.
For the week ending January 24, the ocean freight rate for shipping bulk grain, from the Gulf to Japan, was $41.00 per metric ton, 5 percent less than the previous week. The cost of shipping, from the PNW to Japan, was $23.00 per metric ton, 2 percent less than the previous week.
For the week ending January 28, the U.S. average diesel fuel price was unchanged from the previous week at $2.965 per gallon, 10.5 cents below the same week last year.