Create a free Feed & Grain account to continue reading

Suez Canal Unblocked

Will take a few weeks for ship traffic to get back to normal

Kevin Blog Headshot Headshot
Cargo container

Suez Canal Unblocked

  • 140 ships are expected to go through the canal today following the release of a grounded container ship.
  • The ship became jammed diagonally across a southern section of the canal in high winds early last Tuesday, halting shipping traffic.
  • The massive ship has been straightened in the canal and further tugging operations were able to start when the tide rose.
  • About 15% of world shipping traffic transits the Suez Canal in any given year.
  • At least 369 vessels were waiting to use the canal, including dozens of container ships, bulk carriers, and oil tankers
  • Some shippers rerouted their cargoes around Africa, adding about two weeks of extra sailing and extra fuel costs.
  • Ocean freight rates are sitting at record highs and would have likely surged even higher if the canal had remained closed.

FBN’s Take On What It Means: It’s expected it will take a few weeks for ship traffic to get back to normal. A lengthy closure would have snarled logistics and caused a significant cost increase for exporters in the EU or Black Sea that would be sending grain supplies to Asia. US exports may get a small bump from the closure, but it will not last long now that blockage is removed.

FBN
FBN

Black Sea Export Prices Lower

  • IKAR reported Russian 12.5% protein wheat was down $16 per tonne to $257 per tonne FOB last week.
  • Sovecon pegged Black Sea wheat export prices down $21 per tonne at $253 tonne FOB.
  • Ukrainian wheat for export was down $20 tonne last week to $254-$260 per tonne FOB according to APK-Inform.
  • Corn export prices were reported at $248-$255 per tonne FOB, down $7 per tonne for the week.
  • According to reports, China may have purchased more than 3 million tonnes of Black Sea corn for Oct-Dec shipment last week.
  • Weather for the new wheat crop remains favorable with good rainfall expected this week in key growing areas.
  • If favorable weather continues, Ukraine’s grain crop could grow to 75 million tonnes this year from 65 million tonnes last season.

FBN’s Take On What It Means: Spring grain planting is just getting underway in Ukraine, a few weeks later than usual due to cool temperatures. Soil moisture profiles appear to be supportive to a good start to the growing season as the region looks for production to bounce back from last season’s less than ideal conditions. Exporters have been aggressively pricing old crop supplies which has weighed on the markets.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.


Page 1 of 244
Next Page