The eye-catching item in Thursday’s Export Sales report was a large sale of 140,770 MT of medium-grain rough rice to Mexico. Thus far in the 2018/19 marketing year medium-grain export sales are running 41% ahead of last year’s pace. By comparison, USDA projected in the March WASDE that medium-grain exports would be up 27% in the 2018/19 marketing year.
Long-grain export sales to date are also outpacing the USDA’s March projection of a 7% increase in 2018/19. As of March 21, long-grain export sales are 12% ahead of last year for the comparable week. Better rough rice sales to Mexico are a key feature so far in the 2018 marketing year – up 48% over last year.
Of note, the Midwest flooding is creating logistics issues, especially along the Mississippi River. Barge rates have been increasing and grain basis has weakened considerably this week. Mississippi River barge traffic is still restricted to daylight hours through St. Louis, MO; Memphis, TN; Vicksburg, MS; and Baton Rouge, LA.
Widespread flooding is slowing barge and rail movement of grain and fertilizer.
IT would be a good idea to visit with your fuel dealer about the International Maritime Organization’s (IMO) new regulations on sulfur emissions. In general terms, marine ship operators are being required to significantly reduce sulfur emissions.
Low-sulfur diesel is an acceptable alternative fuel that many (likely most) ship operators will turn to. Thus, demand for it is expected to increase and push prices higher.
The IMO regulations go into effect January 1, 2020. The Energy Information Administration (EIA) expects “shifts in petroleum product pricing” to begin as early as mid-to-late 2019. However, the effects on petroleum prices will be felt most in 2020. Link to the (EIA) report: IMO 2020.