PNW corn transit faces fresh delays on demand surge

Exporters moving corn to the Pacific Northwest continue to face delays despite the picture for US logistics easing overall as the weather begins to improve, market sources have told Agricensus Friday.

A surge in demand came just as bad weather struck in the northern plains, the main rail transit route for moving product to the PNW, while rains and thawing ice saw rivers running into the US Gulf swollen to the point of closure.

Asia’s demand came to the fore this week, as a series of tenders across South Korea and Taiwan saw close to 600,000 mt of corn traded while a burst of USDA private export sales saw 110,000 mt of corn booked for Japan out of the 2017/18 marketing year, followed by today’s announcement of 260,000 mt of corn to unknown destinations.

“The volume of rail traffic has been huge, but things just don’t move as fast when it’s cold. It’s getting better, but the PNW is still delayed,” one market source said.

“The PNW is still competitive, so everybody looks at the PNW,” a second source said, with cash premiums in the region reaching towards 95 cents to 100 cents over the CBOT corn futures – up from around 85 cents over in early February.

“The summer corn push off PNW is impressive though; 45-50 shuttles of corn to South Korea just this week… That's put a solid bid on that April-June market,” the first market source said.

Data from the USDA suggests that March tends to be amongst the busiest months for the PNW, with 24 vessels waiting in port as of March 1.

That is the highest number of vessels since June 2017, while February and March of that year were the busiest months of the year averaging 38.75 and 35 vessels waiting per week.

With Brazil and Argentina between crops, the US typically emerges as a major seller at this time of the year, but with US prices particularly competitive versus other feeds, demand has surged.

That has placed additional strains on logistics already strained by the weather and has driven cash prices across the twin exporting hubs of the PNW and the US Gulf.

USDA data shows that cash bids for US number 2 yellow corn for shuttle trains delivered to the full coast PNW hit $5.035/bu on Thursday, the highest level seen this year.