The secondary freight market reached prices that were historic highs during the last week of October, according to USDA's Nov. 7 Grain Transportation Report.
The non-shuttle bids/offers for November BNSF cars were $492.00 higher than the prior week at $908.50 above tariff. The average bids/offers for shuttles were up $596.00 from one week ago at $1,696.00 above tariff. High freight prices continue for December as well with average non-shuttle bids/offers up $925.00 and shuttle bids/offers up $587.50 above tariff.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT T
Traffic on the BNSF has been a challenge, not only due to the record corn, wheat and bean harvest, but also due to track maintenance/improvements which are scheduled to be completed in the near future.
Rail service on the CPRS has also been stressed as Canada recently completed a record canola and spring wheat harvest and there are reports that ships are waiting in Canadian ports for grain to arrive for export. While the CN Railway recently resolved its labor issue, service has been slow not only because of a record harvest, but also due to three derailments in October closing portions of the tracks. USDA's Grain Transportation Report stated, "Despite record car deliveries, railcar demand is still twice the available supply, leading to a shortage of railcars on both the Canadian Pacific and Canadian National lines."
Soybean barges moving down river accounted for 71% of the grain moving south for the week ended November 2, according to USDA. Corn barges moving down river accounted for 25% of the grain movement with total corn inspections last week up 20% from the prior week.
Soybean basis levels have been strong for both rail and barges heading to the Gulf for export in recent weeks. Besides the strong export lineup, a push from upper Mississippi River terminals to move soybean and corn barges ahead of the winter closing has also contributed to the rise in grain movement to the Gulf.
Grain movement in barges for the week ended November 2 totaled 856,626 tons, which was up 1.4% from the prior week. During that same week, 549 grain barges moved down river, which was 3% higher than the prior week and 921 grain barges unloaded in New Orleans, which was up 13.3% from the prior week.
USDA reported that loadings of ocean-going grain vessels were 7% higher than 1 year ago for the last week of October and looking at the past four weeks, there was an average of 46 vessels loaded at the Gulf for export each week. During the next 10 days, 79 vessels are expected to be loaded which is 36% more than the same timeframe last year and is 23% above the four-year average.