Moving Grain: River Navigation Challenges Continue

©Debra L Ferguson Stock Photography

Navigation Conditions Continue to Challenge Barge Shippers

Barge logistics saw some improvement when Smithland Locks and Dam on the Ohio River reopened on March 9. It had been closed since February 20 due to highwater conditions. The reopening allowed traffic to resume in and out of the Ohio River. However, due to the closure, no down-bound grain traffic was reported down river at Olmsted Locks and Dam for the week ending March 9.

Navigation conditions on the lower Mississippi River continue to concern grain exporters and hamper barge operations. American Commercial Barge Line’s website reports their tow size from Cairo, IL to the Gulf has been reduced from 40 to 25 barges. Highwater and occasional fog has disrupted barge operations on the Mississippi River for the last several weeks.

For the week ending March 9, only 486 grain barges were unloaded in the New Orleans area, the lowest since June 2017. This reduction shows in analysis of the number of barges unloaded weekly in New Orleans, with the 4-week average being 21 percent less than the 3-year average during the same period of the year.

Grain Inspections Down but Sizeable Wheat Inspections

For the week ending March 7, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.24 million metric tons (mmt). This total is a 1 percent decrease from the previous week, a 20 percent decrease from last year, and is 15 percent below the 3-year average.

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Despite the decrease in total inspections of grain, wheat inspections jumped 21 percent from week to week. However, the increase in wheat inspections could not offset the decrease in inspections of corn and soybeans, which accounted for 72 percent of total grain inspections.

Grain inspections in the Pacific Northwest (PNW) decreased 9 percent from the previous week, but Mississippi Gulf grain inspections increased 6 percent.

Diesel Fuel Prices Increase for Fourth Consecutive Week

According to the Energy Information Administration (EIA), average on-highway diesel fuel prices have increased 11.3 cents per gallon over the past 4 weeks. For the week ending March 11, average prices were $3.079 per gallon. This is 10.3 cents higher than last year.

Average crude oil prices increased from January to February, due to supply volatility and trade sanctions with Venezuela.

Snapshots by Sector

Export Sales

For the week ending February 28, unshipped balances of wheat, corn, and soybeans totaled 33.3 mmt. This marks an 8 percent reduction from the same period last year.

Net weekly wheat export sales were .622 mmt, up 31 percent from the previous week. Net corn export sales totaled .970 mmt, down 20 percent from the previous week. Net soybean export sales were .312 mmt, down 85 percent from the past week.

Rail

U.S. Class I railroads originated 20,314 grain carloads for the week ending March 2, which is down 6 percent from the previous week, 13 percent from last year, and 12 percent from the 3-year average.

Average March shuttle secondary railcar bids/offers (per car) were $1,796 above tariff for the week ending March 7. This is down $265 from last week, and up $446 from last year. Average non-shuttle secondary railcar bids/offers were $438 above tariff, up $163 from last week. There were no non-shuttle bids/offers this week last year.

Barge

For the week ending March 9, barge grain movements totaled 361,522 tons. This is 53 percent higher than the previous week and up 1 percent from the same period last year.

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For the week ending March 9, 248 grain barges moved down river. This is 87 barges more than the previous week. There were 486 grain barges unloaded in New Orleans, 5 percent lower than the previous week.

Ocean

For the week ending March 7, 29 ocean-going grain vessels were loaded in the Gulf. This is 26 percent less than the same period last year. Fifty-eight vessels are expected to be loaded within the next 10 days, 13 percent less than the same period last year.

For the week ending March 7, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $40.00 per metric ton. This is 1 percent more than the previous week. The cost of shipping from the PNW to Japan was $23.00 per metric ton, 1 percent more than the previous week.

Full report.


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