The panamax bulker sector has reached its highest point in almost six months as South America carries out its harvest seasons for soybean and corn.
Major grain exporters Brazil and Argentina are both reaping the commodities at full tilt for the 2022-2023 marketing year, which spans from July to the end of June.
Brazil, which accounts for 35% of soybean exports, is expected to export 92.3m tonnes of the oilseed during its harvest period from March to June, according to the US Department of Agriculture (USDA).
The record harvest expectation is up from 77m exported for the entirety of the 2021-2022 marketing year.
Brazil corn exports are forecast to reach 51m tonnes, or 22% of global exports. The country harvests the grain all year long.
Argentina is expected to export 29m tonnes of soybeans for the 2022-2023 marketing year after collecting the grain from mid-March to mid-June, USDA tables show. It produces 23% of the world’s soybean exports.
The country is expected to export 20m tonnes of corn during the same marketing year to make up 17% of world exports during the 2022-2023 marketing year, USDA projections show.
All of this harvesting has led to higher panamax rates over the past week.
Since 28 March, the Baltic Exchange’s Panamax 5TC set of spot-rate averages across five key routes has risen 18.6% to $16,700 per day to reach the highest level since late October.
“The panamax segment has continued to see further upside primarily as a result of strong grains export activity out of the South America region,” Jefferies analyst Omar Nokta wrote in a note on Thursday.
“Overall panamax rates are at their highs for the year.”
The Baltic Exchange reported four panamaxes getting fixed on Thursday for trips from the eastern coast of South America to Singapore.
Marmaras Navigation’s 81,300-dwt Chryssa K (built 2012) scored the highest rate when trader Louis Dreyfus hired the ship at $21,000 per day with a $1.1m ballast bonus attached. The ship is set to be loaded in late April.
On 28 March, trader Cargill hired Clemko Ship Management’s 81,500-dwt Androusa (built 2012) at $16,600 per day with a $660,000 ballast bonus included to take the same voyage after loading the ship on 15 April.
“Quite a few fixtures have been reported done for mid-April and beginning of May date, while charterers seemed to be prompt to fix,” shipbroker BRS Group wrote in a report on Thursday.
“Overall, the ECSA [east coast of South America] market is considered to be the main driver on the region, whereas some believe it is even the reason why the paper market has showed such positive momentum.”
Despite rising spot rates, the futures market dipped on Thursday, however, according to the Baltic Exchange.
May panamax contracts lost $554 per day on Thursday to come in at $18,100 per day, while June contracts shed $454 per day to land at $18,300 per day.
