Transportation and Export Report for 13 February 2009

Transcription

1 O NEIIL COMMODIITY CONSULTIING Transportation and Export Report for 13 February 2009 Ocean Freight Insights and Comments: World freight markets continue to be intriguing. It was another bumpy week as freight values continued to rise for the first part of the week and then retreated during the second half. I think it is mostly a case of moving too far too fast. It's kind of like a sick kid trying to get up and get too active following a long illness; the recovery is going to take a little longer than many wish. Over the past three weeks the freight markets, especially the Baltic indexes, got quite excited over seeing things bottom out and bounce a little. Paper players in the Freight Forward markets may have even gotten a bit overly enthusiastic and too exuberant over the increase in new dry-bulk business and their expectations as to where prices could go. After all, this was a market in desperation and looking for something to feel positive about. I've spoken with freight operators who believed that the Chinese government stimulus package would re-energize the construction industry there and bring back substantial freight demand for Iron Ore and raw materials. This may be, at least partially accurate, but I don't think things are that simple and do not believe the market will return to god health without additional world demand. As stated above, it s going to be a bumpy and more gradual recovery; the market is not out of its sick bed yet. Last week we saw Rio Tinto chartering Capesize (160,000 tonne) vessels of Iron Ore from west Australia to China at $7.50-$8.00/mt. This week they were getting slightly better rates of $10.50-$11.30/mt, an increase of about $3.00/mt or 38 %. As reported last week, the recent rise in freight rates is not soon enough or sufficient enough to save all players. Lloyds List reports that SAMSUN Logix, one of South Korea s largest bulker operators, has applied for court protection, under receivership in South Korea, following a cash flow crisis caused by the financial difficulties at Armada Shipping (Singapore), Britannia Bulk and Industrial Carriers. The company owns 15 bulkers and has another four new buildings on order. The firm s fleet comprises capesize, panamax and handysize vessels built in the 1980s and 1990s. The oldest vessel is the 1982-built, 21,289 dwt Ataraxia, while the youngest is the 1999-built, 69,406 dwt Clio. Company new buildings on order are reported to include two 57,000 dwt bulkers at STX Shipbuilding in South Korea that are due for delivery in 2010 and two other vessels on order at a Chinese yard.. The firm s chartered-in fleet includes very large crude carriers and Aframax tankers. Samsun Logix has filed rule B attachments in New York Southern district court against a number of shipping companies, including China Shipping Development (HK), Ocean Glory Shipping, Parkroad Corporation, Sealink Shipping and PCL Shipping. Wire stories are reporting that new ships are being sold fresh out of the ship yard at 50 % of their construction contract value Construction defaults and non-payments are still commonplace in the freight industry. The P2A Baltic Atlantic Panamax freight index remains higher for the week but has lost some ground over the last three days. The P2A index closed today at This is up 1,866 points or 12 % over the last week, but down 676 points or 4 % from Tuesdays close. The P3A Baltic Panamax index in the Pacific also topped out on Tuesday but was able to close higher for the week. The P3A Panamax index in the Pacific closed Friday at 8293 which is up 93 points or 1 % from last Friday but down by 1,672 points or 17 % from its mid-week high of 9965 points In dollar terms, the spot and day U.S. Gulf to Japan Panamax market is approximately $ Handymax vessels are trading at a slight premium to Panamax size vessels. Panamax rates from the PNW to Japan are now up to about $20.00/mt. in the day market. The market for both port ranges is trading at a $1.00-$1.50/tonne premium for the day slots. The PNW/Gulf freight spread to Asia has widened out to approximately $20.00/tonne (.51/bushel for corn and.54-/bushel for wheat and soybeans).

2 2 With the US Yellow Corn Fob vessel market spread for March at about.38/bushel ($14.95/mt) (+1.05 H PNW verses +.67 H Gulf) and an ocean freight spread (PNW freight savings of) $20.00/mt, corn business will be encouraged to load off of the US west Coast. The cash Soybean market spread is very close to.55 per bushel or $20.20 per tonne H PNW verses +.70 K Gulf), so, save for the better blend potential at the Gulf, it will be a bit of a push for exporters on preferable loading range. The strong west coast demand for Corn, Soybeans and Wheat, is helping to keep PNW vessel loading activities at near capacity. Most fobbing capacity off of the US PNW for March is already committed and April is filling up. YELLOW CORN (USD/MT FOB VESSEL) #2 YC Fob Vessel GULF PNW LAKES Max. 15.0% moisture BASIS FLAT PRICE BASIS FLAT PRICE BASIS FLAT PRICE March 0.67 $ $ April 0.54 $ $ May 0.55 $ $ June 0.49 $ $ July 0.52 $ $ Country News: Mexico: US Exporters reported the sale of 206,000 mt of US origin Corn to Mexico for the 2009 crop year. Taiwan: Tuesday night TMIPA (MFIG) purchased 26,000 mt of US yellow Corn from ADM at $212.00/mt CandF for arrival March 22-April5, On Wednesday the USDA reported that US Exporters reported sales of 116,000 metric tons of U.S. corn for delivery to Taiwan in the marketing year. On Thursday night TMIP purchased 35,750 mt of US Corn at a Basis level of CK CandF for April shipment.

3 Korea: Wednesday night KFA purchased three cargoes of 55,000 mt each of US Yellow Corn for arrival LH May-FH June, 2009 at $ $202.90/mt CandF. (This is $3.20/tonne more than they paid last week for May-June arrival). On Thursday night Private exporters reported the sale of 116,000 tonnes of U.S. corn to South Korea for delivery during the 2008/09 marketing year Also on Thursday night MFG purchased 110,000 mt of US Corn on a CandF basis at $ for arrival FH June and KFA bought 110,000 mt of US Corn for arrival LH May-FH June at $ $ CandF. 3 Argentina: The Argentine government has approved the issuance of export permits of 520,000 mt of wheat and 6 million mt of Yellow Corn for Spain: According to Reuters News Service, Spain will ask the European Union to re-open tenders to import maize and sorghum at a specially reduced levy under the terms of a long-standing agreement, industry groups and farmers' unions said on Thursday. Under the terms, Spain may import up to 2 million tonnes of maize and 300,000 tonnes of sorghum, although no tenders were held last year due to high world prices. Portugal may import 500,000 tonnes of maize. China: BEIJING, Feb 11 (Reuters) - China to aid financing for shipbuilding industry China's cabinet on Wednesday approved a plan for supporting the domestic shipbuilding industry, telling banks to step up trade finance for exports of ships, the official Xinhua news agency said. "The State Council decided... to encourage financial institutions to expand their financing to purchasers of exported ships, and that it will extend fiscal and financial support for domestic buyers of long-range ships until 2012," Xinhua said. New ship orders will drop to between 20 million deadweight tonnes (DWT) to 30 million DWT in 2009, compared with million DWT in 2008, Xinhua said earlier this week, citing the China Association of National Shipbuilding Industry. China has implemented wide ranging tax cuts and subsidies to help its auto, steel and textile industries since the beginning of this year, hurt by a slowing economy and fallout from the global financial crisis. US Vessel Line-Ups/loading delays at Export Elevators: Mississippi River: 0-6 days Miss. River Mid-Stream loaders: 0-5 days Texas Gulf: 1-4 days Pacific Northwest: 1-5 days (One facility has 8 day line-up) Freight Quotes on Egyptian Wheat Tender: US Gulf or Atlantic to Egypt: $ /mt France to Egypt: $15.00/mt Russia-Black Sea to Egypt: $ /mt

4 4 OCEAN FREIGHT MARKETS and SPREADS Recent Freight Fixtures: 20,000 tonnes Maize from Nueva Palmira, Uruguay to Tripoli, Libya Feb at $ Noble 24,000 tonnes Soybeans from Paranagua Brazil to Greece for Feb at $ Soymills Bulk Freight Indices for HSS - Heavy Grain, Sorghum and Soybeans. Route and Vessel Size Current Week Change from previous Remarks U.S.D/MT week 55,000 U.S. Gulf-Japan $40.00 Up $ ,000 ton Handymax At $42.50 per tonne 55,000 PNW- Japan $20.00 Down $ 0.50 Handymax at $ ,000 U.S. Gulf - China $39.00 North or South China 25,000 U.S. Gulf- Veracruz, $14.00 Up $2.00 3,000 MT daily discharge México rate 35-40,000 U.S. Gulf- Veracruz, México $12.00 Deep draft and 8,000 MT per day discharge rate. 25/35,000 U.S. Gulf- East Coast Colombia $16.00 West Coast Colombia $ ,000 U.S. Gulf Algeria $31.00 $ ,000 mt daily discharge 3,000 mt daily discharge 55,000 U.S. Gulf -Egypt $ ,000-60,000 mt 60-70,000 U.S. Gulf $ Europe - Rotterdam 55-60,000 Brazil -China $ ,000 Argentina-China $ ,000 U.S. Gulf to Iraq $ Umm Qasr*(Incl. War risk ) 55,000 PNW to Iraq $ $ ,000 U.S. Gulf to Morocco $25.00 One port discharge. 3,000 MT discharge rate

5 5 U.S. EXPORT STATISTICS: Report Activity as of 5 February 2009 New Sales (000 MT) Weekly U.S. Export Sales YTD Export Total Projected Commitments Export Program **(000 MT) for Year (000 MT) Percent of Export Projection Total Sales for Next Marketing Year (000 MT) Corn 2, ,419 44, % 311 Sorghum , , % 0 Barley % 0 Wheat , , % 191 Soybeans 1, , , % 63.6 USDA, * Marketing year for barley is 1 June - 31 May. Marketing year for corn /sorghum is 1 Sept Aug. ** Combination of outstanding sales and total exports. Above and below figures will vary between new sales and net sales due to USDA rounding and adjustments made for sale cancellations and adjustments. This report is issued every Thursday on the following site: Wheat: Net sales of 411,700 metric tons were up 26 percent from the previous week and 94 percent from the prior 4- week average. Increases reported for Egypt (115,000 MT), Nigeria (79,100 MT, including 24,000 MT switched from unknown destinations), Indonesia (68,000 MT, including 58,000 MT switched from unknown destinations), Japan (65,700 MT), Yemen (52,500 MT), Thailand (47,800 MT), Mexico (24,700 MT), and South Korea (22,200 MT), were partially offset by decreases for unknown destinations (73,500 MT), Trinidad (14,200 MT), and the Dominican Republic (11,300 MT). Net sales of 24,000 MT for 2009/10 delivery were for the Dominican Republic (13,000 MT) and Mexico (11,000 MT). Exports of 517,300 MT were up 28 percent from the previous week and 38 percent from the prior 4-week average. The primary destinations were Japan (102,100 MT), Mexico (82,900 MT), Nigeria (82,600 MT), Sri Lanka (57,800 MT), Israel (55,700 MT), and Thailand (31,800 MT). Corn: Net sales of 1,543,800 MT--a marketing-year high--were up 33 percent from the previous week and 73 percent from the prior 4-week average. Increases reported for unknown destinations (641,200 MT), South Korea (484,000 MT, including 105,000 MT switched from unknown destinations), Egypt (215,400 MT), Taiwan (174,000 MT, including 56,700 MT switched from Japan), Syria (44,200 MT, including 26,200 MT switched from Egypt), and Mexico (31,300 MT), were partially offset by decreases for Japan (168,500 MT), Guatemala (11,500 MT), and Trinidad (5,500 MT). Exports of 567,500 MT were down 24 percent from the previous week and 18 percent from the prior 4-week average. The primary destinations were Japan (201,000 MT), Mexico (136,300 MT), Taiwan (69,200 MT), Kenya (30,200 MT), Syria (26,200 MT), and Ecuador (22,000 MT). Barley: Net sales of 3,900 metric tons were for Canada. There were no exports reported during the week. Sorghum: Net sales of 18,000 MT were for unknown destinations (9,200 MT), Japan (5,000 MT), and Mexico (3,800 MT). Exports of 39,800 MT were for Mexico (36,800 MT) and Japan (3,000 MT). Soybeans: Net sales of 1,068,700 MT were up noticeably from the previous week and 21 percent from the prior 4-week average. Increases for China (724,300 MT, including 220,000 MT switched from unknown destinations), Mexico (96,100 MT), Indonesia (77,600 MT), the Netherlands (61,800 MT, including 60,000 MT switched from unknown destinations), Egypt (47,200 MT), and Syria (36,600 MT, including 18,600 MT switched from Egypt), were partially offset by decreases for unknown destinations (29,000 MT). Net sales of 500 MT for delivery in 2009/10 were for Japan. Exports of 1,392,800 MT were up 31 percent from the previous week and 48 percent from the prior 4-week average. The primary destinations were China (901,300 MT), Indonesia (82,700 MT), Mexico (78,400 MT), Taiwan (62,800 MT), the Netherlands (61,800 MT), Japan (58,100 MT), and South Korea (57,700 MT).

6 6 WEEKLY U.S. EXPORT INSPECTIONS: Monday s report 9 February 2009 for the Export week ending 5 February 2009 Commodity Export Inspections Current Previous (1,000 bushels) This Week Previous Market Year Year to Date Week YTD 2008 YTD as Percent of 2007 Corn 28,817 28, ,834 1,124, % Sorghum 847 1,242 65, , % Soybeans 46,567 38, , , % Wheat 19,048 12, , , % Barley ,816 28, % Source: USDA/AMS. *Marketing Year is June 1-May 31 for wheat and barley and Sept. 1 Aug.31 for corn, sorghum and soybeans. Week to week reports will vary due to exporter reported corrections and cancellations to previous weeks reports. This report is issued each Monday on web site: Export Inspections Highlights: Last Week (000 Bushels) YC % WC % Sorghum % Soybeans % Gulf 21,330 77% 1, % % 31,307 67% PNW 4,655 17% 13,773 30% Lakes Atlantic % Interior Export Rail 1,642 6% 1,379 3% Total (mil. Bushels) 27, % 1, % % 46, % Metric Tons 701,766 30,228 21,515 1,267,359 White Corn Shipments: 30,228 mt to Kenya 30,228 Total Sorghum Shipments: 2,997 mt to Japan 18,518 mt to Mexico 21,515 Total

7 Data sheet below: USDA weekly export inspections report with corrections to the last three weeks grain export inspections reports. Each week USDA adds a long list of additions and subtractions to their previous week s report. (This usually covers a 2-5 week prior time frame). USDA Grain Inspections Report: CONTAINER SHIPMENTS of GRAIN 9-Feb Last Week metric tons MT YC WC YSB HRS HRW SWH Milo Barley TOTAL Taiwan 4,953 4,953 China 0 Hong Kong 178 2,994 3,172 Indonesia 1,170 1,170 Malaysia 0 Philippines 0 Vietnam Singapore 0 Japan 0 South Korea 0 Thailand 0 Jordan 0 Algeria 0 Australia 0 Sub total 5,131 4,872 10,003 USDA Corrections/Additions to last weeks report: Taiwan 16,130 11, ,005 China Main 67,767 67,767 Hong Kong Indonesia 12,438 12,438 Malaysia 0 Philippines 327 3,184 3,511 Vietnam 940 2,177 3,117 Japan South Korea 1,626 4, ,124 Singapore 0 Thailand 1,633 1,960 3,593 Columbia 0 Costa Rica 0 Dominican Republic 0 Ecuador 0 Guatemala 0 Peru 0 India 0 Jordan 0 Suriname 0 Morocco 0 Portugal 0 Sub total 19, , , ,585 Mt. Grand Total 24, ,135 2, , ,327 Number of containers 1, , ,927

8 Below are graphs and charts representing estimated containerized grain exports to foreign countries for Please note that these estimates are based on FGIS grain inspection figures and therefore may be understated/incomplete. 8 Total (MT) Costa Rica Container Shipments 2008: Month YC YSB Jan Feb 0 0 Mar Apr 0 0 May Jun Jul Aug Sep 0 0 Oct 0 0 Nov Dec 0 0 Total 1,

9 Total (MT) Colombia Container Shipments 2008: Month YSB Jan 0 Feb 0 Mar 0 Apr 0 May 0 Jun 0 Jul 27 Aug 0 Sep 1,606 Oct 1,606 Nov 0 Dec 0 Total 3,239 9

10 10 CONTAINER GRAIN SHIPMENTS: Not much has changed visa-a-vie container freight rates this week but loading and sales volumes have continued to improve. Competitive container rates from the mid-west and the natural advantages of small containerized shipments is allowing the containerized grain business to stage a bit of a come back from last quarters doldrums. This week saw renewed demand from Taiwan, the Philippines and Malaysia. Other News: From BBC News:

11 11 US RIVER BARGE FREIGHT ** If you want to know how slow farmer selling is, just look at how barge freight rates have fallen. First Half of March 2009 Illinois River is 325 % of tariff = $16.62/mt or $.42bushel for Corn and $.45/bushel for Soybeans and Wheat Lower Ohio River is 230 % of tariff = $11.89/mt or $.30/bushel for corn and $.32/bushel for soybeans and wheat St. Louis South is 235 % of tariff = $10.34/mt or $.26/bushel for Corn and $.28/bushel for Soybeans and Wheat SECONDARY RAIL CAR MARKET Car placement period: First Half March 2009 BNSF Pool Cars Shuttle Trains UPRR Pool Cars Shuttle Trains Bid -$25 against offers at +$25/car. Bid -$100/car against offers at -$25/car. Bid -$50/car against offers at +$20/car Bid -$250/car against offers of -$100/car Best Regards, Jay O'Neil O Neil Commodity Consulting And IGP at Kansas State University (cell) (office) joneil@ksu.edu *** The information in this market report is derived from sources believed to be reliable and accurate but can not be guaranteed. Forward looking projections are never completely accurate, and these markets move quickly. All market data is subject to change with market conditions and Traders opinions. Please obtain market updates and reconfirm all values with your regular freight supplier before making any trading decisions based on this data. This message and any attachments may contain confidential or privileged information and are only for the use of the intended recipient of this message. If you are not the intended recipient, please notify the sender by return , and delete or destroy this and all copies of this message and all attachments. Any unauthorized disclosure, use, distribution, or reproduction of this message or any attachments is prohibited and may be unlawful.