An official reading on US grain exports should give comfort to supramax shipowners hoping for good cargo demand from North America in the grain shipping season.
The US Department of Agriculture (USDA) says that total inspections of grain – corn, wheat, and soybeans – for export reached 3.4 million tonnes, up 15% from the week before. Moreover, inspections are more than double the three-year average, the USDA said in its weekly grain transportation report.
Grain inspections are running ahead of last year’s levels, with the USDA saying that inspections are at their highest since late October 2015.
The USDA said inspections of grain for export out of the Mississippi River region of the US Gulf were up 19% for the week, but were flat out of the Pacific Northwest. Soybean inspections showed the most gains, with a 34% increase thanks to more European-bound cargoes.
Wheat and corn inspections were up 11% and 3%, respectively, thanks to increased demand from Asia and Latin America, the USDA said.
The USDA is forecasting strong US harvest of wheat and corn this year, leading to greater export cargo activity. In its August forecast, the USDA projected US wheat exports of 25.8 million tonnes this year, compared to 21 million tonnes last year. Coarse grains, including corn, are expected to see exports reach 62 million tonnes this harvest year, compared to 58 million tonnes last year.
Supramax freight rates, particularly on the US front-haul, have been firming on hopes of strong US export activity in the backend of the year. The Baltic Exchange’s index for supramax rates from the US Gulf to Europe rose from around $7,800 per day in mid-August to current levels of $10,300 per day.
For the slightly larger Tess 58-style supramaxes, rates to Europe have risen from $8,400 per day to $10,900 per day over the same time. The US Gulf-to-Asia route has gone from $11,600 per day to $13,800 per day.
