Ocean Freight Rates Inched Up After Declining 11 Consecutive Weeks
After declining 11 consecutive weeks, ocean freight rates for shipping bulk grain have been creeping upward for the past 2 weeks.
As of March 5, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $43.75, and the rate from the Pacific Northwest (PNW) to Japan was $23.75. From then until the week ending May 21, the U.S. Gulf-to-Japan rate declined 22 percent to $34 per mt, and the PNW-to-Japan rate declined 25 percent to $17.75.
These declines were a response to a dip in global trade of bulk commodities.
For the week ending June 4, the rates rose slightly to $35 per mt for the U.S. Gulf-to-Japan route and to $18.50 per mt for the PNW-to-Japan route. For the week ending June 4, 35 oceangoing grain vessels were loading or waiting to load in the U.S. Gulf, compared to an average of 28 vessels per week during the 8 prior weeks.
Eighteen vessels were loading or waiting to load in PNW, compared to an average of 14 vessels per week during the prior 8 weeks.
Grain Inspections Lowest Since Late December
For the week ending June 4, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions were 1.76 million metric tons (mmt).
Grain News on AgFax
Total grain inspections were down 17 percent from the previous week, down 15 percent from last year, and down 24 percent from the 3-year average. Inspections of grain were the lowest since late December of last year. From the previous week (week to week), inspections were down 22 percent for wheat, down 4 percent for corn, and down 47 percent for soybeans.
Week to week, Pacific Northwest (PNW) grain inspections decreased 20 percent, and Mississippi Gulf inspections decreased 23 percent. Also, week to week, current outstanding export sales were down for wheat and corn but up for soybeans.
Diesel Fuel Prices Increase
For the week ending June 8, the U.S. average diesel fuel price increased 1 cent from the previous week to $2.396 per gallon, 70.9 cents below the same week last year. Average diesel fuel prices inched up, as economic activity began slowly resuming across the country.
Over the past 22 weeks, diesel fuel prices have increased only 1 other week—0.4 cents during the week ending May 25. The Department of Energy’s Energy Information Administration expects the largest declines in U.S. oil consumption have already occurred and demand will generally rise during the next 18 months.
Snapshots by Sector
For the week ending May 28, unshipped balances of wheat, corn, and soybeans totaled 20.7 million metric tons (mmt). This represented a 3-percent decrease in outstanding sales from the same time last year. Net corn export sales were 0.638 mmt, up 49 percent from the past week.
Net soybean export sales were 0.495 mmt, down 23 percent from the previous week. Net weekly wheat export sales were 0.180 mmt, down 14 percent from the previous week.
U.S. Class I railroads originated 21,246 grain carloads during the week ending May 30. This was 3 percent less than the previous week, 2 percent more than last year, and 6 percent lower than the 3-year average.
Average June shuttle secondary railcar bids/offers (per car) were $31 below tariff for the week ending June 4. This was $63 more than last week and $370 lower than this week last year. There were no non-shuttle bids/offers this week.
For the week ending June 6, barge grain movements totaled 795,780 tons. This was 4 percent more than the previous week and 211 percent more than the same period last year.
For the week ending June 6, 517 grain barges moved down river—29 more barges than the previous week. There were 670 grain barges unloaded in New Orleans, 9 percent more than the previous week.
For the week ending June 4, 31 oceangoing grain vessels were loaded in the U.S. Gulf—3 percent more than the same period last year. Within the next 10 days (starting June 5), 48 vessels were expected to be loaded—7 percent more than the same period last year.
As of June 4, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $35.00. This was 2 percent more than the previous week. The rate from PNW to Japan was $18.50 per mt, 3 percent more than the previous week.