Market Perspectives February 21, 2014

Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Is the market is up or down this week? The answer is, both. Freight markets are firmer in the Pacific where vessel availability seems to be getting tighter; but the Atlantic is still soft and suffering under the weight of too many vessels ballasting to the east coast of South America in anticipation of the big Grain export programs there.

The most significant action in ocean freight markets over the past two weeks has been the changing spreads between the Atlantic and Pacific. The Baltic indices are expressing things a bit more dramatically than the physical markets this week. I’ve moved Grain rates in the Atlantic up a little this week more as an adjustment/correction to last week’s figures then to indicate any real strength in that market. We are also seeing a renewed winding in the price relationship between Panamax and Handymax/Supremax vessels.

According to USDA data, during the week ending February 13, 48 ocean-going grain vessels were loaded in the Gulf, which is 33 percent more than the same period last year. 76 vessels are expected to be loaded within the next 10 days, which is 90 percent more than the same period last year. So, U.S. grain exports remain robust.