Market Perspectives April 25, 2014

Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was a better week in world freight markets from the perspective of a vessel owner or operator, at least from the standpoint that things did not decline further and did show slight improvement in the Baltic Indices. It was not, however, enough of a bump to improve the bottom line of most vessel owners. Hopefully, things have bottomed out for the time being. As you will note below; Genco Shipping & Trading Limited (NYSE: GNK), with 53 Dry-Bulk vessels, filed for bankruptcy earlier this week. So it is obvious that the overall financial environment for vessel owners remains quite difficult.

Capesize vessels are now earning about $9,100/day and Panamax vessels only $6,700/day. Grain vessel line ups in the USGulf are declining and Grain vessel wait times in Brazil are down about 30 % from this time last year.

I understand that the first Panamax vessel with Brazilian soybeans completed unloading at a mid-stream rig in the Mississippi River last week and that a second Panamax soybean vessel is currently discharging via mid-stream rig into barges. The month of May should see the arrival of additional Handymax vessels of Brazilian Soybeans coming into the U.S. East Coast and the Gulf. Trade estimates are that we could see close to 1.5- 2 MMT of Brazilian YSB imported into the U.S. this year and SBM as well.