The U.S. Department of Agriculture's latest Grain Transportation Report reveals a complex picture for grain exports and transportation for the week ending February 6, 2025. The data shows varying trends across different grain commodities and transportation modes, reflecting the dynamic nature of the agricultural market.
Export sales:
Unshipped balances of corn, soybeans, and wheat for marketing year 2024/25 totaled 35.70 million metric tons, down 2% from the previous week but up 9% year-over-year. Corn export sales showed significant strength, increasing 12% to 1.65 million metric tons. Wheat sales also performed well, rising 30% to 0.57 million metric tons. However, soybean export sales experienced a sharp decline, dropping 52% to 0.19 million metric tons.
Rail transportation:
U.S. Class I railroads originated 25,492 grain carloads during the week, unchanged from the previous week but 2% fewer than last year. Despite the slight decrease in volume, transportation costs saw a significant uptick. Shuttle secondary railcar bids for February increased dramatically to $1,025 above tariff, up $683 from the previous week. This surge in rail transportation costs could potentially impact grain shipping decisions and overall export competitiveness.
Barge movements:
Barge transportation showed positive momentum, with grain movements totaling 670,550 tons, up 8% from the previous week and 25% higher than the same period last year. The number of grain barges moving downriver increased by 34 to 423, indicating stronger demand for river transportation. This uptick in barge movements could be attributed to the increased corn and wheat export sales, as well as potentially more favorable river conditions.
Ocean freight:
The ocean freight sector showed mixed signals. While 28 oceangoing grain vessels were loaded in the Gulf, 3% fewer than the same period last year, the outlook for the next 10 days was more optimistic. Fifty-three vessels were expected to be loaded, representing a 33% increase from the same period last year. This projected increase in vessel loadings aligns with the higher corn and wheat export sales figures.
Shipping rates also saw an increase, with the cost of shipping grain from the U.S. Gulf to Japan rising 2% to $46.25 per metric ton. Similarly, rates from the Pacific Northwest to Japan increased 1% to $27.00 per metric ton. These rising ocean freight costs, combined with higher rail transportation expenses, could potentially squeeze margins for grain exporters.
Fuel prices:
The U.S. average diesel price increased 1.2 cents to $3.677 per gallon, although this figure remains 43.2 cents below the same week last year. The slight uptick in fuel prices adds to the overall increase in transportation costs across various modes.
Industry implications:
The contrasting trends in export sales across different grain commodities highlight the complex factors influencing the agricultural market. While corn and wheat exports show strength, the significant decline in soybean sales warrants attention from industry stakeholders. The overall increase in transportation costs across rail, barge, and ocean freight could potentially impact profit margins and influence shipping decisions in the coming weeks.
