Upper Mississippi River Navigation System Ended on November 30
On November 30, the U.S. Army Corps of Engineers, St. Paul District, recorded the last 2020 traffic of the Mississippi Lock and Dam 2 (Hastings, MN). Typically, from late November or early December until mid-March or early April, the Corps shuts down navigation of the Upper Mississippi River in Minnesota, Wisconsin, and Iowa.
The closure is mostly to avoid navigation through ice. During this period, no grain barge spot rates will be available for the Twin City and Mid-Mississippi locations. Also, note the Corps is scheduled to start its winter renovation and maintenance at Lock and Dam 4 (Alma, WI) around December 7.
This repair work requires the Lock to be completely closed until March 14, 2021.
Pacific Northwest Inspections Reach High for the Year; Total Exports Down
For the week ending December 3, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 3.6 million metric tons (mmt). Total grain inspections were down 11 percent from the previous week, up 59 percent from last year, and up 33 percent from the 3-year average.
Grain News on AgFax
From the previous week, wheat and soybeans were down slightly, but corn inspections dropped 29 percent, mainly because corn shipments to Asia fell 47 percent. At 1.35 mmt, Pacific Northwest (PNW) grain inspections reached a high for the year, increasing 28 percent from the previous week.
The week-to-week increase in PNW inspections, however, could not offset the 35-percent drop in the Mississippi Gulf and the 20-percent decrease in the Texas Gulf. During the last 4 weeks, grain inspections were 42 percent above the same time last year and 38 percent above the 3-year average.
STB Schedules Technical Conference Exploring Class Exemption Issues
In a technical conference on December 18, the Surface Transportation Board (STB) will discuss its prospective approach for considering class exemptions from rail regulation. STB and its predecessor, the Interstate Commerce Commission, have long had broad authority to exempt certain rail traffic from regulation, when such regulation “is not needed to protect shippers from the abuse of market power” (49 U.S.C. § 10502).
Exempt classes include many agricultural commodities (e.g., cottonseed, dry beans, dry peas, and hay), as well as types of service (e.g., trailer-on-flatcar, container-on-flatcar, or boxcar). While grain is nonexempt and subject to STB regulation, the conference could provide a glimpse into broad issues relevant to grain shippers. These issues include STB’s possible review of rail market power and the nature of competition in rail transportation. Those interested in the virtual conference should register by December 11.
Snapshots by Sector
For the week ending November 26, unshipped balances of wheat, corn, and soybeans totaled 59.3 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 1.372 mmt, down 18 percent from the past week. Net soybean export sales were 0.407 mmt, down 47 percent from the previous week. Net wheat export sales were 0.446 mmt, down 44 percent from the previous week.
U.S. Class I railroads originated 25,099 grain carloads during the week ending November 28. This was unchanged from the previous week, 23 percent more than last year, and 22 percent more than the 3-year average.
Average December shuttle secondary railcar bids/offers (per car) were $42 above tariff for the week ending December 3. This was $13 less than last week and $679 more than this week last year. There were no non-shuttle bids/offers this week.
For the week ending December 5, barge grain movements totaled 825,395 tons. This was 26 percent less than the previous week and 25 percent less than the same period last year.
For the week ending December 5, 522 grain barges moved down river—185 barges fewer than the previous week. There were 902 grain barges unloaded in New Orleans, 8 percent lower than the previous week.
For the week ending December 3, 35 oceangoing grain vessels were loaded in the Gulf—13 percent more than the same period last year. Within the next 10 days (starting December 4), 62 vessels were expected to be loaded—44 percent more than the same period last year.
As of December 3, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $41.50. This was unchanged from the last available rate on November 19. The rate from PNW to Japan was $23.25 per mt, 1 percent more than the rate on November 19.
For the week ending December 7, the U.S. average diesel fuel price increased 2.4 cents from the previous week to $2.526 per gallon, 52.3 cents below the same week last year.