Moving Grain: Drought Causes Barge Transportation Issues in South America

Mississippi River barges lines up at Port of Rosedale, Mississippi ©Debra L Ferguson

South American Drought Causes Concern for Barge Transportation

Over the last several weeks, drought-driven declines in water levels of the rivers of Argentina, Brazil, and Paraguay have forced barges to lower their capacities to avoid grounding. These lighter barge loads have slowed the flow of corn, soybeans, soybean meal, and soybean oil to key export locations.

In Paraguay, parts of the Paraná River (a major artery for soybean transport) have been closed to barge navigation since the beginning of April. According to Bloomberg, free-on-board corn export prices in Argentina and Brazil for spot, 30 days forward, and 60 days forward are being quoted at record highs.

Argentina and landlocked Paraguay depend more on barge than Brazil, which mostly relies on rail and truck for agricultural transportation. Supply disruptions from these key South American sources could shift global buyers to pull from U.S. stocks instead.

USACE Seeks Comments on Guidance for Implementing Water Resources Development Act 2020

The U.S. Army Corps of Engineers (USACE) is currently accepting stakeholder comments on implementation guidance for the Water Resources Development Act (WRDA) 2020. The public is encouraged to submit comments through the Federal e-rulemaking portal before May 7.

WRDA 2020 included key provisions to invest in U.S. ports, harbors, and inland waterways; build more resilient communities; and ensure that USACE carries out projects in an economically and environmentally responsible manner.

Corn Inspections Increase Sharply

For the week ending April 22, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 2.8 million metric tons (mmt). Total grain inspections were up 14 percent from the previous week, up 28 percent from last year, and up 16 percent from the 3-year average.

Grain News on AgFax


The increase in inspections reflected a 25-percent jump in corn inspections and a 5-percent increase in soybean inspections. Inspections destined to Asia accounted for most of the corn increase.

Corn accounted for about 70 percent of total grain inspections for the week. Inspections of wheat, however, were down 10 percent from the previous week.

Pacific Northwest (PNW) grain inspections rose 21 percent from the past week, and Mississippi Gulf inspections rose 23 percent.

Snapshots by Sector

Export Sales

For the week ending April 15, unshipped balances of wheat, corn, and soybeans totaled 36.9 mmt. This was 4 percent lower than last week, but 64 percent higher than the same time last year.

Net corn export sales were 0.387 mmt, up 18 percent from the past week. Net soybean export sales were 0.064 mmt, down 29 percent from the previous week. Net wheat export sales were 0.240 mmt, significantly down from the previous week.

Rail

U.S. Class I railroads originated 26,236 grain carloads during the week ending April 17. This was an 8-percent increase from the previous week, 27 percent more than last year, and 16 percent more than the 3-year average.

Average May shuttle secondary railcar bids/offers (per car) were $38 above tariff for the week ending April 22. This was $54 less than last week and $148 more than this week last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending April 24, barge grain movements totaled 957,500 tons. This was 20 percent higher than the previous week and 45 percent higher than the same period last year.

For the week ending April 24, 597 grain barges moved down river—92 barges more than the previous week. There were 729 grain barges unloaded in New Orleans, 16 percent more than the previous week.

Ocean

For the week ending April 22, 32 oceangoing grain vessels were loaded in the Gulf—9 percent less than the same period last year. Within the next 10 days (starting April 23, 2021), 41 vessels were expected to be loaded—5 percent less than the same period last year.

As of April 22, the rate for shipping a metric ton of grain from the U.S. Gulf to Japan was $62.50. This was 8 percent more than the previous week. The rate from PNW to Japan was $36.50 per metric ton, 7 percent more than the previous week.

Fuel

For the week ending April 26, the U.S. average diesel fuel price was unchanged from the previous week at $3.124 per gallon, 68.7 cents above the same week last year.

Full report.




The Latest


Send press releases to Ernst@Agfax.com.

View All Events


Send press releases to Ernst@Agfax.com.

View All Events