Market Matters Blog

Total inspections of grain for export as of July 18 were down 20% from the prior week and 26% lower than the 3-year average, USDA reported in the weekly Grain Transportation Report. While wheat inspections were down 5% from the prior week, they are 23% above the 5-year average. Thanks for the most part to China, unshipped wheat export sales of 8 million metric tons are the highest since March 2011. Dow Jones reported recently that China's winter wheat crop, which is 90% of their total yearly wheat output, has been damaged by weather. It has been reported that as much as 15 million tons of China's winter crop has been damaged by frost and wet weather has caused sprout damage, making the wheat not fit to grind for flour. China's flour mills hope to source milling quality HRW wheat from Canada and the U.S. along with the SRW wheat China already intends to continue sourcing from the U.S. and buying Australian white wheat. In the most recent USDA S&D report in July, imports of wheat this year from China were nearly doubled with estimates pushed to 8.5 million metric tons versus last year's China import total of 3.2 million metric tons. The DTN average basis levels for HRW wheat and SRW wheat continue to remain above the 5-year averages for both grains this time of year.

Barge traffic has not been hampered recently as water levels continue to recede and all river systems are open. As can be seen in weekly export inspection numbers, not much grain moved down river last week. USDA reported that for the week ending July 20, 344,798 tons of grain were moved in barges, 43.5% lower than the previous week and 37% lower than the same time last year. A total of 221 barges moved down river last week, which was down 44.5% from the prior week with 315 grain barges unloading in NOLA (New Orleans) for export, 26% lower than the prior week. Barge freight in most of the river corridors was lower than last year at this time with Illinois barge freight down 6% from last week and 26% lower than last year and 32% lower than the 5-year average. Barge movements through Lock 27 at Granite City, Ill., were 59% lower than last year at this time and 66% lower than the 3-year average. USDA did report that barges heading up river last week totaled 527, up 169 barges from the prior week.

(ES/CZ)

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