Grain Barge Movements Recovered From Previous Low Tonnages
For the week ending March 6, grain barge movements recovered from the effects of severe weather in the last half of February. Despite high water conditions on the Ohio River and Lower Mississippi, total downbound grain was 848,441 tons, 93 percent higher than last week and the highest level since the beginning of February. Meanwhile, although total upbound empty barges stayed the same as the previous week (632), upbound empty barges on the Ohio River dropped 30 percent because of high water.
In the St. Louis area, on the other hand, upbound empty barges on the Mississippi River totaled 396 barges, a 32-percent increase from last week. Early this week, there were some barge delays on the Ohio River and Lower Mississippi due to high water, but the industry expects water conditions to improve for the rest of the week.
Latest WASDE Projections Could Affect Transportation Demand and Ocean Freight Rates
In the March World Agricultural Supply and Demand Estimates (WASDE), USDA’s World Agriculture Outlook Board (WAOB) released its adjusted projections for marketing year (MY) 2020/21. According to the report, since February, estimated MY 2020/21 U.S. soft white wheat exports rose and estimated hard red winter wheat exports fell. If these adjusted totals are realized, they can incrementally reduce demand for rail and ocean vessels in the Texas Gulf region, while supporting western rail and barge volumes.
Also, since February, estimated MY 2020/21 U.S. corn exports—as well as U.S. soybean and soybean derivative exports—remain unchanged. WAOB estimates Brazil corn and soybean exports at record levels, which could hasten the seasonal demand for ocean transportation from Brazil, and consequently put upward pressure on ocean freight rates for shipping bulk grain.
Grain News on AgFax
Diesel Fuel Prices Continue Rising Quickly
In the week ending March 8, U.S. average diesel fuel prices increased 7 cents to reach $3.143 per gallon. Last week average diesel prices surpassed $3 per gallon for the first time since January 2020. Over the past 5 weeks, prices have increased more than 40 cents per gallon. According to the Department of Energy’s Energy Information Administration (EIA), diesel fuel prices have increased because of rising crude oil prices and supply chain disruptions.
EIA’s latest Short-Term Energy Outlook reports crude prices increased $8 per barrel in February. Higher prices reflect expectations oil demand will rise globally. Higher prices also reflect ongoing petroleum supply limitations by overseas suppliers. In addition, disruptions to petroleum supply from extreme U.S. winter weather (notably, in Texas) put upward pressure on crude oil prices in February.
Snapshots by Sector
For the week ending February 25, unshipped balances of wheat, corn, and soybeans totaled 46.6 mmt. This was 6 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 0.116 mmt, down 74 percent from the past week. Net soybean export sales were 0.334 mmt, up significantly from the previous week. Net wheat export sales were 0.219 mmt, down 31 percent from the previous week.
U.S. Class I railroads originated 23,530 grain carloads during the week ending February 27. This was a 25-percent increase from the previous week, 14 percent more than last year, and 16 percent more than the 3-year average.
Average March shuttle secondary railcar bids/offers (per car) were $369 above tariff for the week ending March 4. This was $369 more than last week and $331 more than this week last year. There were no non-shuttle bids/offers this week.
For the week ending March 6, barge grain movements totaled 848,441 tons. This was 93 percent higher than the previous week and 108 percent higher than the same period last year.
For the week ending March 6, 525 grain barges moved down river—258 barges more than the previous week. There were 857 grain barges unloaded in New Orleans, 10 percent more than the previous week.
For the week ending March 4, 36 oceangoing grain vessels were loaded in the Gulf—24 percent more than the same period last year. Within the next 10 days (starting March 5, 2021), 53 vessels were expected to be loaded—29 percent more than the same period last year.
As of March 4, the rate for shipping a metric ton of grain from the U.S. Gulf to Japan was $57.50. This was unchanged from the previous week. The rate from PNW to Japan was $32.25 per metric ton, unchanged from the previous week.