Changing volume projections for U.S. wheat exports could be reflected in freight flows this spring, with more volumes going toward the western ports and fewer volumes going to the Gulf Coast, according to recent reports from the U.S. Department of Agriculture (USDA).
USDA’s World Agricultural Supply and Demand Estimates (WASDE), a monthly report that estimates the production, storage and export volumes of various agricultural commodities, adjusted its projections for U.S. soft white wheat exports and hard red winter wheat exports for wheat’s 2020-21 marketing year, which starts on June 1 annually.
The adjustments that came out in Tuesday’s WASDE report now estimates U.S. soft white wheat exports of 245 million bushels, versus its February estimate of 225 million bushels, while U.S. hard red winter wheat exports will be around 350 million bushels instead of February’s estimate of 370 million bushels.
“White wheat exports are raised on continued strong sales and shipments to China and South Korea,” USDA’s March WASDE report said. “Conversely, hard red winter exports are lowered as commitments to several Western Hemisphere markets are below a year ago.”
What does this mean for freight transportation? The adjustments can affect how much wheat exports go where, according to USDA’s weekly Grain Transportation Report (GTR).
“If these adjusted totals are realized, they can incrementally reduce demand for rail and ocean vessels in the Texas Gulf region, while supporting western rail and barge volumes,” GTR said Thursday.
Meanwhile, although WASDE’s estimates for U.S. corn exports and U.S. soybean and soybean derivative exports remain unchanged between February and March, USDA’s World Agricultural Outlook Board estimates that Brazil corn and soybean exports could reach record levels, “which could hasten the seasonal demand for ocean transportation from Brazil and consequently put upward pressure on ocean freight rates for shipping bulk grain,” GTR said.
Because Brazil is in the Southern Hemisphere, its peak harvest season occurs during the Northern Hemisphere’s springtime, while peak harvest season in the U.S. runs in the fall.
U.S. corn exports for the 2020-21 marketing year are estimated at 2.6 billion bushels, which is unchanged from February but 46% higher than the 2019-20 marketing year. The increase is “mainly due to higher demand from Asia and other major importers” and somewhat due to tightening global supplies, GTR said.
U.S. soybean exports are estimated at 2.25 billion bushels for 2020-21, which would be 34% higher than 2019-20 exports.
The marketing year for corn and soybeans runs from Sept. 1 to Aug. 31.