Market Perspectives January 31, 2014

Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Xin Nian Kuei Le and Gong Xi Fa Cai. It is the Lunar New Year and the Chinese Golden week celebration has begun. If the markets were not already quiet enough, then they will be more so over the next seven days.

World ocean freight markets remain soft and defensive with very little trading. It is therefore difficult to peg specific values. The Baltic indices are lower, but I have to leave most freight rates unchanged due to the lack of activity. The expectation (hope) is that things will pick up in a week or so when everyone is back at work and the South American grain harvest gains momentum. U.S. grain and oilseed exports are continuing at a very good pace and are soaking up much of our export capacity for the next three months. U.S. Gulf and PNW Export elevations should remain tight through April unless the Chinese cancel (swap out) some of their U.S. soybean purchases. World grain buyers would be well advised to keep their logistical needs covered three or more months forward and to buy CIF to protect their delivery requirements. Shipment logistics are already messy and likely to get worse as South American programs get underway. Buying grains, oilseeds and freight is not the problem; getting them loaded and shipped in a timely fashion is.