The South Atlantic grain market saw a notable increase in freight rates during the recent trading week, driven by heightened demand for cargoes. This surge comes as the local soybean harvest approaches its conclusion by the end of June. Additionally, there was a change in tonnage distribution, with a leaner ballast list expected for the week of June 16.
Market participants expressed a cautious optimism, even as the trading week began quietly due to holidays in Europe and the Middle East. Favorable market fundamentals continued to support upcoming laycans, despite limited inquiries and signs of volatility in the rates as the market transitions from the soybean harvest. Soybean cargo volumes rose significantly in week 21, peaking with 48 shipments in week 22, marking a seven-week high.
Among these, only one shipment was for sugar, according to S&P Global Commodities at Sea data. Meanwhile, the availability of soybean meal, corn, sorghum, and wheat was minimal, highlighted by the absence of soybean meal shipments in week 22. S&P Global Commodity Insights indicated that near-term soybean demand might increase, particularly as some Chinese sources reported improved crush margins.
Moreover, shipments to China picked up, with 48 deliveries recorded in week 22, reversing a prior downward trend. While the Japan-Korea-Taiwan region saw a slight increase in shipments, only one cargo was reported for week 22. Recent trade discussions have diminished overall shipments to Mainland China.
This situation underscores a broader uncertainty related to ongoing tariff negotiations and China’s decreasing reliance on the U.S. for various commodities. The spread between ballasting and laden vessels has shown a slight decrease, with an observed increase in ballasting vessels. S&P Global Commodity Insights noted that the global Panamax laden-ballast spread has continued to narrow in both the Atlantic and Pacific basin, showcasing stability in Panamax shipments.
Moreover, the Capesize segment experienced a strong week starting June 2, driven primarily by robust demand from Australia, which boosted rates across all dry bulk sizes. This uptick is expected to support ongoing momentum as market participants anticipate a rise in freight rates in the coming weeks, despite uncertainties regarding the first half of July.