Mississippi River Locks 27 and Arkansas River Lock 1 Close for Repair
The U.S. Army Corps of Engineers is closing the main chamber of the Mississippi River Chain of Rocks Lock and Dam (Locks No. 27, near Granite City, IL) from February 1 to February 18 for maintenance and repair. During this time, the auxiliary lock will open for traffic.
Although February is usually fairly slow for grain movements on this part of the river, the industry expects some level of delays during the closure. Between 2016 to 2020, the average February total tonnage for grain movements through Locks 27 was 1.08 million tons, 4 percent of annual total tonnage through the Lock.
The Corps also closed the Arkansas River Norrell Lock and Dam (Lock No. 1, near Tichnor, AR) to replace the lock interlock system between February 2 and February 6, 2021.
STB Seeks Comments on Railroad Petition To Modify Revenue Adequacy Determination
In late December 2020, the Surface Transportation Board (STB) opened a proceeding to consider a petition by three Class I railroads. The
railroads seek changes in STB’s procedures for determining whether Class I rail carriers are revenue adequate.
Grain News on AgFax
Currently, STB makes an annual determination by comparing a railroad’s rate of return on net investment (ROI) to the industry cost of capital. The issue of determining revenue adequacy is central to STB’s mission of balancing the interests of shippers and carriers.
On the one hand, STB is charged with ensuring railroads earn sufficient revenue to attract investment and maintain their networks. On the other, STB must ensure shippers are protected from undue applications of market power and pay reasonable rates.
Comments are due by March 1, 2021 and replies, by March 31, 2021.
Export Sales of Corn, Wheat, and Soybeans to China Continue Rising
Large sales of soybean, corn, and wheat to China continue to drive grain transportation demand. By the week ending January 21, total commitments of soybeans to China for marketing year (MY) 2020/21 had reached 34.7 million metric tons (mmt), accounting for 60 percent of total U.S. soybean export sales and almost triple the amount the same time last year for MY 2019/20.
Also, by the week ending January 21, total commitments of U.S. corn to China for MY 2020/21 were 11.8 mmt, versus just 0.061 mmt by the same time last year for MY 2019/20.
Total commitments of U.S. wheat to China were 2.6 mmt by the week ending January 21, versus 0.194 mmt by the same time last year. For MY 2020/21, China has become the third largest importer of U.S. wheat behind Mexico and the Philippines.
Snapshots by Sector
For the week ending January 21, unshipped balances of wheat, corn, and soybeans totaled 48.2 million metric tons (mmt). This was 3 percent lower from last week, but still represented a significant increase in outstanding sales from the same time last year.
Net corn export sales were 1.850 mmt, up 29 percent from the past week. Net soybean export sales were 0.466 mmt, down 74 percent from the previous week. Net wheat export sales were 0.381 mmt, up 15 percent from the previous week.
U.S. Class I railroads originated 27,295 grain carloads during the week ending January 23. This was a 1-percent decrease from the previous week, 25 percent more than last year, and 23 percent more than the 3-year average.
Average February shuttle secondary railcar bids/offers (per car) were $99 above tariff for the week ending January 28. This was $289 less than last week and $236 more than this week last year. There were no non-shuttle bids/offers this week.
For the week ending January 30, barge grain movements totaled 1,027,650 tons. This was 7 percent lower than the previous week and 119 percent more than the same period last year.
For the week ending January 30, 618 grain barges moved down river—63 barges fewer than the previous week. There were 894 grain barges unloaded in New Orleans, 8 percent fewer than the previous week.
For the week ending January 28, 37 oceangoing grain vessels were loaded in the Gulf—28 percent more than the same period last year. Within the next 10 days (starting January 29, 2021), 65 vessels were expected to be loaded—51 percent more than the same period last year.
As of January 28, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $46.50. This was 1 percent more than the previous week. The rate from the Pacific Northwest to Japan was $26.75 per mt, 1 percent more than the previous week.
For the week ending February 1, the U.S. average diesel fuel price increased 2.2 cents from the previous week to $2.738 per gallon, 21.8 cents below the same week last year.