PNW corn rush slams US logistics as weather doubles transit time

Bad weather on the main railway lines to the ports of the Pacific Northwest is causing major delays in moving corn for export, market sources said Wednesday.

“The logistical issue is now quite serious, because the railway shuttles are being delayed due to the bad weather,” one trader said of the situation.

“It’s too cold across Montana,” he continued, with the journeys that would normally take two or three days to move from Minnesota to the PNW now taking up to a week, with empty shuttle trains taking as long to return.

The delays in getting corn to PNW locations came just as the US has seen healthy demand from a string of Asian countries, including South Korea, Japan and Vietnam.

“It’s a logistics nightmare; you can’t load vessels quick enough and the weather has not been conducive,” a second market sources said.

According to USDA data, basis bids for shuttle trains delivered full coast PNW passed through $5/bu Wednesday as buyers struggled to secure enough volume.

That is up from $4.38/bu on January 25.

And the issues are also hitting soybean exports, with Andy Shissler of A&W Trading telling Agritalk Radio that bean exports are down on "lots of little reasons."

"Some of it is river conditions, ice conditions, cold weather, hard-to-move barge freight and hard-to-move stuff off the west coast.”

Subsidies extended to PNW routes

More volumes of US corn exports have been going through the PNW since the start of the year as the railroad companies extended subsidised routes to bolster trade.

The move has teased substantial business bound for Asia away from the Gulf and to the PNW, reversing a prevalent trend seen in 2017, according to USDA data.

Through 2017, Japan took 58% of its corn imports from the US Gulf, versus 42% from the PNW with the balance coming via containers.

So far in 2018, Japan has taken 64% of its corn imports from the PNW, according to the data, with 35.8% coming from the Gulf.

Japan is the only country to have loaded corn from the Gulf this year, versus Japan, Taiwan, Indonesia and Malaysia all of which loaded corn from the Gulf in 2017.

“That’s the situation we face out of the PNW; hopefully it’ll be resolved in March as the weather improves but for now it seems quite bullish,” the first source said.