Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: As you can see from the market reports of the last few weeks, rates and market activity are just bouncing around in a narrow price range. One week things are up fifty cents to a dollar and the next week they are back down. It has been, and likely will continue to be, difficult for ocean freight markets to have a breakout on either side of the equation. It is likely, however, that we will experience a little uptick in values as we get into the fall grain harvest and export demand increases. Storage space will be a challenge this year for the U.S. corn and soybean harvest; some facilities are already telling farmers that they can only take their grain if it is sold. Facilities will need to quickly ship product in order to stay open and handle the whole crop. This will surely lead to the need to increase exports in the first quarter of the crop year. However, once the harvest activity and subsequent need to move grain diminishes things are surely destined to fall back into their old trading ranges.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2016 versus January-December 2015 annual totals for container shipments to Indonesia.
