Moving Grain: Panama Canal Maintenance, Toll Proposal

Panama Canal Lock Maintenance Tentatively Scheduled, Reduces Transit Capacity

The East Lane of the Gatun Panamax Locks on the Panama Canal will be closed for 10 hours, for maintenance and repair work, on August 20, 2019. The estimated transit capacity of the Canal due to the maintenance work is 28–30 vessels per day, rather than the normal transit capacity of 32–34 vessels, depending on vessel mix and other factors. At this time, no major delays are anticipated.

Panama Canal Proposes Toll Structure Modifications and Collects Industry Input

On July 24, 2019, the Panama Canal Authority held a public hearing on its proposed toll structure modifications set for January 1, 2020. After consideration and implementation of some of the suggestions presented in the comments, the Panama Canal Board of Directors will approve the proposal and present it to the Cabinet Council of the Republic of Panama for official approval.

The proposal impacts all segments including dry bulk, passenger, containership, vehicle carrier, tanker and RoRo (roll on roll off) vessels. The proposed modifications are designed to increase transparency and flexibility, and to ensure the waterway remains competitive. For details, see here.

Wheat Drives Increase in Total Grain Inspected for Export

For the week ending August 8, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.41 million metric tons (mmt). This amount is up 12 percent from the previous week, unchanged from last year, and 4 percent below the 3-year average.

The increase in inspections was driven by a 66 percent jump in wheat inspections. Wheat shipments increased primarily to Asian destinations. Week-to-week inspections of corn increased 9 percent, but soybean inspections decreased 9 percent for the same period. Inspections of grain in the Mississippi Gulf increased 17 percent from the previous week, and inspections in the Pacific Northwest (PNW) increased 10 percent.

Lower Production and Exports Forecasted by USDA in 2019/20

USDA’s August World Agricultural Supply and Demand Estimates (WASDE) and Crop Production forecasts U.S. farmers will produce 19.6 billion bushels of corn, soybeans, and wheat in 2019/20. This is less than 1 percent below the previous month’s projection, but 6 percent lower than last year.

USDA projects 2 percent less total grain supplies (including beginning stocks, production, and imports), which could mean less demand for grain transportation in the new marketing year. States with the largest drop in production from last year in million bushels (mbu) are: Illinois (-576 mbu), North Dakota (-380 mbu), Ohio (-325 mbu), and South Dakota (-321 mbu).

USDA expects domestic use of corn, soybeans, and wheat would be on-par with last year but expects exports to fall 4 percent.

Snapshots by Sector

Export Sales

For the week ending August 1, unshipped balances of wheat, corn, and soybeans totaled 15.3 mmt. This indicates a 10 percent decrease in outstanding sales, compared to the same time last year. Net corn export sales reached .043 mmt, down 70 percent from the previous week. Net soybean export sales were .102 mmt, down 29 percent from the past week. Net weekly wheat export sales reached .488 mmt, up 27 percent from the previous week.

Rail

U.S. Class I railroads originated 22,607 grain carloads for the week ending August 3. This is a 1 percent increase from the previous week, 10 percent less than last year, and 3 percent lower than the 3-year average.

Average August shuttle secondary railcar bids/offers (per car) were $150 below tariff for the week ending August 8. This is $54 more than last week and $56 lower than last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending August 10, barge grain movements totaled 567,094 tons. This is a 16 percent decrease from the previous week and 40 percent less than the same period last year.

For the week ending August 10, 368 grain barges moved down river. This is 74 fewer barges than the previous week. There were 705 grain barges unloaded in New Orleans, 7 percent more than the previous week.

Grain News on AgFax


Ocean

For the week ending August 8, 32 ocean-going grain vessels were loaded in the Gulf. This is 3 percent more than the same period last year. Forty-four vessels are expected to be loaded within the next 10 days. This is 20 percent fewer than the same period last year.

As of August 8, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $49.00. This is 1 percent less than the previous week. The rate from the PNW to Japan was $27.00 per mt, 2 percent more than the previous week.

Fuel

For the week ending August 12, the U.S. average diesel fuel price decreased 2.1 cents from the previous week, to $3.011 per gallon. This price is 20.6 cents less than the same week last year.

Full report.


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