- May cargo volumes may be lower compared to April
- Pacific performance raises concerns for ballasters
- Soybean shipments see modest declines
The South Atlantic grain market saw a notable decline in activity due to global public holidays and concurrent shipping events, reports Platts.
Despite the slowdown, strong cargo fundamentals are expected to return in June, with substantial loadings projected to drive renewed market engagement and affect freight rates. The sluggish performance in the Pacific, however, may draw additional ballasting tonnage toward the South Atlantic.
China’s Grain Harvest Influences Freight Outlook
Soybean cargo volumes dipped in week 19, while corn and sorghum exports remained negligible ahead of their respective harvests. Shipments are anticipated to increase for sorghum in May and for corn in June. While overall cargo volumes lagged behind earlier weeks and the previous month, the market remains resilient, despite slight rate softening. The fronthaul rate for 60,000 mt Santos-Qingdao grain was assessed at \$35/mt, marking a 3% decline within the week.
Grain shipments declined by 7.2% year over year in Q1 2025, largely due to weak import demand from China, which continues to pursue greater self-reliance in grain supply. Shipment activity to China fluctuated, hitting a low of six cargoes in one week before peaking at 48 in week 17. While soybean shipments have remained strong due to increased Chinese purchases, wheat and maize imports have decreased as domestic production reached record highs in 2024.
Laden-Ballast Spread Contracts
As South Atlantic fronthaul rates ease, the spread between laden and ballasting vessels has tightened. The latest data shows 136 laden and 127 ballasting ships, maintaining the prior week’s spread. A growing number of ballasters—237 expected in the next 30 days—indicates mounting tonnage pressure. Activity in the Pacific briefly increased but has since stalled, with short-haul bids seen as uncompetitive. Most trading is focused on the second half of June, with earlier laycans commanding a $500/day premium. Offers mostly remain above $13,000/day.
The near-term market outlook hinges on Pacific performance recovery, which could alleviate pressure from ballasting tonnage. Meanwhile, grain volumes out of East Coast South America are expected to rise in the coming weeks, potentially supporting rate stabilization.
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Source: Platts
