Unshipped US grain export balances soar, totaling 40.81 million metric tons

The U.S. Department of Agriculture’s latest Grain Transportation Report, released on November 14, 2024, highlights a significant 34% year-over-year increase in unshipped balances, the quantity of grain that has been sold for export but has not yet been shipped, of corn, soybeans, and wheat for the 2024/25 marketing year, totaling 40.81 million metric tons. This surge in export commitments comes amid a complex transportation landscape:

Key highlights

Corn export surge:

• Net corn export sales jumped 18% week-over-week to 2.77 million metric tons (mmt).
• This increase suggests growing international demand for U.S. corn, potentially driven by competitive pricing or supply issues in other exporting countries.

Ocean freight rate volatility:

• Rates from the U.S. Gulf to Japan averaged $57.99 per metric ton in Q3 2024, down 5% from Q2 but up 14% year-over-year.
• The current rate of $50.25 per metric ton is 17% lower than the year’s opening rate.
• From the Pacific Northwest to Japan, rates averaged $30.91 per mt—down 5% quarter to quarter, up 13% year to year.
• This volatility reflects changing global trade patterns and economic conditions.

Increased vessel activity:

• Gulf ports loaded 34 oceangoing grain vessels, a 31% increase from the same period last year.
• Within the next 10 days (starting November 8), 59 vessels were expected to be loaded—23% more than the same period last year.
• This increase in vessel activity aligns with the higher unshipped balances, indicating a busy export season ahead.

Rail and barge transportation growth:

• Grain carloads were up 10% year-over-year, with 28,444 carloads originated.
• Barged grain movements increased 6% compared to last year, totaling 766,095 tons.
• 981 grain barges were unloaded in the New Orleans region, a 22% increase from the previous week.
• These increases across different transportation modes highlight the overall growth in grain movement.

Fuel cost relief:

• Diesel prices dropped to $3.521 per gallon, 77.3 cents below last year’s price.
• Lower fuel costs could potentially offset some of the increased transportation expenses.

The substantial increase in unshipped balances suggests a potentially busy period ahead for U.S. grain transportation and logistics. However, the interplay between strong demand and volatile shipping costs will likely continue to shape market dynamics in the coming months.