Bulk Ocean Freight Rates Remain Relatively Low
As of April 11, 2019, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $42.00. This was 11 percent lower than the beginning of the year, and 4 percent below the same period a year ago.
The rate for the Pacific Northwest to Japan was $23.50 per mt. This was 6 percent lower than the beginning of the year, and 3 percent below the same period a year ago.
The relatively low rates were due to slow bulk trade caused partly by closure of mines in Brazil, which impacted iron ore supply. According to Drewry, coal imports in China are also generally low during April because of the off-peak consumption season when electricity generation declines.
This is also the case in other northern hemisphere countries.
Flooding Continues to Disrupt Barge Traffic
Intense spring storms with heavy precipitation, combined with snowmelt runoff, continue to cause flood-related navigation disruptions for most of the nation’s river systems. For the week ending April 13, only two Mississippi River Locks (Locks and Dam 26 and 27) reported any grain barge traffic.
Year-to-date total grain shipments are 27 percent lower than the 3-year average. Spot barge rates of export grain from major originating points has been declining for 3 weeks as many shippers are not looking to buy barge services with the constant highwater conditions.
In addition, barge operators are reporting that some river elevators are not buying grain, as on-going flood conditions can result in damage to grain stored near the river.
Lower Soybean Inspections Push Total Grain Exports Down
For the week ending April 11, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.18 million metric tons (mmt). This indicates a 15 percent decrease from the previous week, a 15 percent decrease from last year, and a 10 percent decrease in the 3-year average.
Grain News on AgFax
Total inspections receded primarily because of a 48 percent drop in soybean inspections. Pacific Northwest (PNW) soybean inspections were the lowest since late December. Although corn inspections increased 11 percent from week to week, wheat inspections were down 8 percent.
Grain inspections decreased 23 percent from the previous week in the PNW, and decreased 9 percent in the Mississippi Gulf.
USDA Releases 2017 Census of Agriculture
Last week, USDA’s National Agricultural Statistics Service released the 2017 Census of Agriculture. The Census is a complete count of U.S. farms and ranches and the people who operate them. It also provides valuable insights into demographics, economics, land and activities on U.S. farms and ranches.
Among the findings, there are 2.04 million farms and ranches (down 3.2 percent from 2012) with an average size of 441 acres (up 1.6 percent) on 900 million acres (down 1.6 percent). In addition, farm expenses are $326 billion with feed, livestock purchased, hired labor, fertilizer and cash rents topping the list of farm expenses in 2017.
Snapshots by Sector
For the week ending April 4, unshipped balances of wheat, corn, and soybeans totaled 31.5 mmt. This indicates a 14 percent decrease in outstanding sales, compared to the same time last year.
Net weekly wheat export sales were .273 mmt, down 61 percent from the previous week. Net corn export sales totaled .548 mmt, up 2 percent from the previous week. Net soybean export sales totaled .270 mmt, down 86 percent from the past week.
U.S. Class I railroads originated 21,815 grain carloads for the week ending April 6. This is a 3 percent decrease from the previous week, 14 percent lower than last year, and 4 percent below the 3-year average.
Average April shuttle secondary railcar bids/offers (per car) were $242 above tariff for the week ending April 11. This is down $365 from last week and $458 below last year. Average non-shuttle secondary railcar bids/offers were $600 above tariff. There were no non-shuttle bids/offers last week or this week last year.
For the week ending April 13, barge grain movements totaled 428,581 tons. This is 15 percent lower than the previous week and 31 percent lower than the same period last year.
For the week ending April 13, 265 grain barges moved down river. This is 65 less barges than the previous week. There were 524 grain barges unloaded in New Orleans, 12 percent higher than the previous week.
For the week ending April 11, 28 ocean-going grain vessels were loaded in the Gulf. This was 30 percent less than the same period last year. Fifty-seven vessels are expected to be loaded within the next 10 days, unchanged from the same period last year.
For the week ending April 15, the U.S. average diesel fuel price increased to $3.118 per gallon, 2.5 cents above the previous week’s average and 1.4 cents above the same week last year.