Moving Grain: High Water Persists in Mississippi River System

Barges on Mississippi River. ©Debra L Ferguson

High Water Persists in the Mississippi River System, Barge Surplus Remains

Several gauges on the Mississippi and Ohio Rivers remain at flood stage, but the navigation challenges have not resulted in higher barge rates. Now at their lowest level since 2017, rates have declined or not changed for the past 6 weeks at all river spans in GTR table 9.

In some areas, such as the lower Mississippi and Ohio Rivers, grain elevators have been inoperable, reducing shippers’ demand for barge services. A number of other factors reduce demand for what are typically export-driven barge services. These factors include increased domestic use of corn for feed and an uncertainty surrounding international trade.

Lowered demand for barge services puts downward pressure on rates. That dampening effect has, so far, outweighed the upward rate pressure from supply chain difficulties. Because both supply and demand reductions produce lower quantities sold, the current market has few shipments selling despite low rates.

USDA Agricultural Outlook Forum: Presentations and 2020/21 Commodity Outlooks Available

Last week, USDA held its 96th Agricultural Outlook Forum. This year’s theme was “The Innovation Imperative: Shaping the Future of Agriculture.” Presentation slides to the sessions are now available online. Of note, USDA, Agricultural Marketing Service staff participated on a panel covering the “Black Sea Grain Export Market,” which collectively discussed transportation costs for Ukrainian wheat and corn and dynamic and structural changes affecting the region. At the Forum, USDA also released its first projections for the next marketing year (2020/21).

DOT Allocates $15.9 Million for Port of Milwaukee

The U.S. Department of Transportation (DOT) has awarded a $15.9 million grant to establish an Agricultural Maritime Export Facility for the Port of Milwaukee, WI. The facility will be the first of its kind on the Great Lakes–St. Lawrence Seaway System. Initially, the facility will handle the export of dried distillers grain with solubles (DDGS), a byproduct of ethanol production.

In the future, the facility is also expected to ship soybeans, corn, and other grains. This project is anticipated to benefit Wisconsin in many ways, including improving the State’s transportation infrastructure, increasing the reliability of its movement of goods, enhancing its agribusiness access to international markets, and creating new jobs in Milwaukee.

USDA Releases Third-Quarter 2019 Mexico Transport Cost Indicator Report

On February 27, 2020, USDA’s Agricultural Marketing Service released the third-quarter Mexico Transport Cost Indicator Report. This quarterly report examines, in depth, the specific cost components of transporting grain, soybeans, fruit, vegetables, and container shipments from the United States to Mexico.

Snapshots by Sector

Export Sales

For the week ending February 13, unshipped balances of wheat, corn, and soybeans totaled 22.4 million metric tons (mmt). This represented a 33-percent decrease in outstanding sales, compared to the same time last year. Net corn export sales reached 1.25 mmt, up 29 percent from the past week. Net soybean export sales were .494 mmt, down 23 percent from the previous week. Net weekly wheat export sales reached .346 mmt, down 46 percent from the previous week.

Grain News on AgFax


Rail

U.S. Class I railroads originated 18,325 grain carloads during the week ending February 15. This was a 12-percent decrease from the previous week, 14 percent less than last year, and 16 percent lower than the 3-year average.

Average March shuttle secondary railcar bids/offers (per car) were $142 below tariff for the week ending February 20. This was $108 more than last week and $1,454 lower than this week last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending February 22, barge grain movements totaled 396,760. This was a 28.3-percent decrease from the previous week and 2 percent more than the same period last year.

For the week ending February 22, 253 grain barges moved down river—121 barges fewer than the previous week. There were 524 grain barges unloaded in New Orleans, 20 percent fewer than the previous week.

Ocean

For the week ending February 20, 27 oceangoing grain vessels were loaded in the Gulf—22.9 percent fewer than the same period last year. Within the next 10 days (starting February 21), 39 vessels were expected to be loaded—40.0 percent fewer than the same period last year.

As of February 20, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $43.25. This was 1 percent more than the previous week. The rate from the Pacific Northwest to Japan was $22.75 per mt, 2 percent more than the previous week.

Fuel

For the week ending February 24, the U.S. average diesel fuel price decreased 0.8 cents from the previous week to $2.882 per gallon, 16.6 cents below the same week last year.

Full report.




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