Moving Grain: Vessel Loading Activity in U.S. Gulf on the Rise

    Vessel Loading Activity in U.S. Gulf Up Since Late Third Quarter of 2020

    In recent weeks, loading activity of oceangoing grain vessels has accelerated in the U.S. Gulf. From the week ending September 3, 2020, to the week ending November 12, 2020, there has been a weekly average of 47 grain vessels loaded or waiting to load.

    In comparison, from the week ending January 2, 2020 to the week ending August 27, 2020, there was a weekly average of 36 vessels loaded or waiting to load. Higher U.S. Gulf grain vessel loading activity is partly due to strong grain shipments to Asia, especially China.

    Year-to-date 2020 (as of November 12, 2020), China imported 23 million metric tons (mmt) of U.S. soybeans, compared to 12.5 mmt for the same period in 2019. In addition, ocean freight rates for shipping bulk items, including grain, were lower than for the same period a year ago.

    Corn and Wheat Inspections Increase, but Total Grain Inspections Decrease From Last Week

    For the week ending November 12, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 3.5 million metric tons (mmt).

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    Total grain inspections were down 12 percent from the previous week, up 26 percent from last year, and up 21 percent from the 3-year average. However, corn inspections increased 18 percent, and wheat inspections increased 7 percent, from the previous week.

    Demand for wheat increased primarily from Africa, and demand for corn increased mainly from Asia. Yet, the increases could not offset the 22-percent drop in soybean inspections.

    From the previous week, grain inspections decreased 19 percent in the Pacific Northwest (PNW) and decreased 12 percent in the Mississippi Gulf. During the last 4 weeks, inspections were up 49 percent from last year and up 32 percent from the 3-year average.

    Coalition Asks FMC To Suspend Detention and Demurrage Charges

    On November 16, a coalition of truckers, shippers, and customs brokers asked the U.S. Federal Maritime Commission (FMC) to consider immediately suspending detention and demurrage charges at the ports of Los Angeles-Long Beach and New York-New Jersey until congestion at the gateways disperses.

    A record spike in imports over the past 4 months has created the congestion, leading to a shortage of available appointments for truckers to pick up imports or return empty containers from marine terminals in Los Angeles-Long Beach and New York-New Jersey. In response, the coalition asked FMC to temporarily suspend demurrage charges for storing containers at marine terminals beyond the allotted free time.

    The coalition also requested a temporary ban on detention charges for returning equipment late. In the long term, the coalition is asking FMC to use the interpretive rule on detention and demurrage as a template for rulemaking.

    Diesel Fuel Prices Have Largest Weekly Increase of the Year

    For the week ending November 16, the U.S. average diesel fuel price increased 5.8 cents from the previous week to $2.441 per gallon. Diesel prices have not had a weekly increase this high in over a year (September 2019). According to a recent Transport Topics article, trucking demand is high, putting upward pressure on diesel fuel prices.

    In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) expects global oil inventories to continue falling in the coming months. However, EIA expects high global oil inventories and surplus production capacity of crude oil will limit upward pressure on oil prices through the end of 2020.

    Snapshots by Sector

    Export Sales

    For the week ending November 5, unshipped balances of wheat, corn, and soybeans totaled 62.4 million metric tons (mmt). This was 3 percent lower than last week, but still represented a significant increase in outstanding sales from the same time last year.

    Net corn export sales were 0.978 mmt, down 63 percent from the past week. Net soybean export sales were 1.468 mmt, down 4 percent from the previous week. Net weekly wheat export sales were 0.301 mmt, down 50 percent from the previous week.

    Rail

    U.S. Class I railroads originated 27,426 grain carloads during the week ending November 7. This was a 2-percent increase from the previous week, 26 percent more than last year, and 23 percent more than the 3-year average.

    Average November shuttle secondary railcar bids/offers (per car) were $63 above tariff for the week ending November 12. This was $302 less than last week and $175 more than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending November 14, barge grain movements totaled 972,835 tons. This was 5 percent more than the previous week and 9 percent more than the same period last year.

    For the week ending November 14, 607 grain barges moved down river—1 barge fewer than the previous week. There were 913 grain barges unloaded in New Orleans, 4 percent fewer than the previous week.

    Ocean

    For the week ending November 12, 41 oceangoing grain vessels were loaded in the Gulf—32 percent more than the same period last year. Within the next 10 days (starting November 13), 66 vessels are expected to be loaded—38 percent more than the same period last year.

    As of November 12, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $41.25. This was 2 percent less than the previous week. The rate from PNW to Japan was $22.75 per mt, 2 percent less than the previous week.

    Full report.




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