Spot Grain Barge Rates Drop from Last Week
As of April 2, spot grain barge rates for export grain originating from major shipping points were 17 to 29 percent lower than a week ago. Barge operators reported that increased navigation difficulties have dampened the demand for barge services. Competition for a dwindling number of customers has put downward pressure on rates. Export grain barge rates from St. Louis were 350 percent of tariff this week ($13.97 per ton), compared to 457 percent ($18.23 per ton) last week.
However, barge rates have been above average for over a year due, in part, to constant highwater conditions. Current rates are 28 to 44 percent higher than the 3-year average. While this week’s rates have dropped, barge operators have to contend with increased costs and reduced transit times.
For more information on river conditions and overall flood-related transportation issues, see this week’s feature article (accessed in the full report below).
STB Hearing on Railroad Demurrage and Accessorial Charges: May 22
The Surface Transportation Board (STB) announced it will hold a public hearing on railroad demurrage and accessorial charges on May 22, 2019. According to the announcement, “railroads, shippers, third-party logistics providers, and other interested parties will be invited to speak at the hearing and report their experience with demurrage and accessorial charges, including matters such as reciprocity, commercial fairness, operational and capacity issues, and effects on network fluidity.”
The hearing will be held in Washington, DC. Further details including time, location, instructions on how to participate, and opportunities to file written comments will be forthcoming from STB.
Grain Inspections Continue to Increase
Grain News on AgFax
For the week ending March 28, total inspections of grain for export from all major U.S. export regions reached 2.45 million metric tons (mmt). This is a 7 percent increase from the previous week, a 2 percent decrease from last year, and is 2 percent above the 3-year average. Total wheat and corn inspections drove the increase in total grain inspections, with wheat increasing 9 percent from the previous week and corn jumping 26 percent.
Shipments of corn rebounded primarily to Latin America. Soybean inspections, however; were down 15 percent from last week. Mississippi Gulf and Pacific Northwest (PNW) ispections increased 13 percent and 9 percent, respectively.
Diesel Fuel Prices Stabilize
After a steady decrease in U.S. average diesel fuel prices at the end of 2018 and through January 2019, prices began to increase during the first three weeks in February. However, prices stabilized in March, increasing only 0.002 cents throughout the month. Crude oil prices have also been stable during the month averaging around $66 per barrel. The Energy Information Administration estimates crude oil prices will average around $64 in 2019.
Snapshots by Sector
For the week ending March 21, unshipped balances of wheat, corn, and soybeans totaled 32.1 mmt. This indicates a 14 percent decrease in outstanding sales, compared to the same time last year. Net weekly wheat export sales were .476 mmt, up 59 percent from the previous week. Net corn export sales totaled .905 mmt, up 6 percent from the previous week. Net soybean export sales, however; totaled .182 mmt, down 54 percent from the past week.
U.S. Class I railroads originated 22,032 grain carloads for the week ending March 23. This is an 18 percent increase from the previous week, 6 percent lower than last year, and unchanged from the 3-year average.
Average April shuttle secondary railcar bids/offers (per car) were $341 above tariff for the week ending March 28. This is down $280 from last week and $247 from last year. Average non-shuttle secondary railcar bids/offers were $400 above tariff, down $25 from last week. There were no non-shuttle bids/offers this week last year.
For the week ending March 30, barge grain movements totaled 670,622 tons. This is 4 percent lower than the previous week and 4 percent lower than the same period last year.
For the week ending March 30, 401 grain barges moved down river. This is 27 less barges than the previous week. There were 653 grain barges unloaded in New Orleans, 1 percent higher than the previous week.
For the week ending March 28, 37 ocean-going grain vessels were loaded in the Gulf. This is 6 percent more than the same period last year. Forty-two vessels are expected to be loaded within the next 10 days, 28 percent less than the same period last year.
For the week ending March 28, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $41.50 per metric ton. This is 1 percent more than the previous week. The cost of shipping from the PNW to Japan was $23.75 per metric ton. This is 1 percent more than the previous week.
For the week ending April 1, the U.S. average diesel fuel price decreased to $3.078 per gallon, 0.2 cent below the previous week’s average and 3.6 cents above the same week last year.