Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Paper traders in the Capesize market decided that good times are finally here and made a bold move to push values higher. The paper market’s move appears overdone, but physical traders were forced to scrambled and cover their shorts to manage risk. Panamax and other sectors followed suit. This was the biggest single week jump of the last three years and has lifted rates to levels not experienced since 2010. Commodity markets appear to be questioning the strength of the economic “Super Cycle”, but freight markets want to believe it is in full swing. I, frankly, do not see the fundamental justification for such a big jump in dry-bulk freight values, but the paper traders seem to have control of the helm at the moment.
There is not much new or positive to report in containerized grain export markets. The difficult situation persists, and it is going to be a very bumpy ride for months to come. Buyers simply need to understand this and plan accordingly.
