HAPPY NEW YEAR to ALL - Blue Water Shipping



ONEIL COMMODITY CONSULTING

Transportation Update Report for 31 May 2008

Greetings from Cairo Egypt.

Ocean Freight Comments:

It seems that freight markets in the Gulf-Atlantic have topped out for the time being. The Baltic P2A Atlantic index fell 8,912 points, or 8 percent this week. The index is now down 19,937 points or 17 percent from its historic high of just 10 days ago.

Panamax rates from the U.S. Gulf to Asia slipped $5.00/tonne to $135.00/tonne. World logistics are improving slightly and there seems to be a slow down in world economic growth. The market remains inverted with rates for July-August trading at about $5.00/tonne discount to the 30 day market.

On Friday, the Baltic Panamax bulk freight index P3A for the Pacific route to Asia went in the opposite direction and rallied 2,241 points or 3 percent from last Fridays close. Te P3A Pacific index is now at 75,639 with physical rates quoted at $78-$79.00/tonne. This action has narrowed the Gulf-Pacific freight spread to Asia by $10.00/tonne to $57.00 per tonne, ($1.45 cents per bushel for corn and Milo and about $1.55 cents per bushel for soybeans and wheat). With the cash corn basis at the PNW at a $1.10/bushel ($43.15/tonne) premium to the Gulf we should continue to see strong export volume off of the U.S. PNW.

Freight talk: Panamax U.S. Gulf to Red Sea -Jeddah, Saudi Arabia at $143.00$145.00/tonne.

Recent vessel fixtures:

30,000 mt HSS River Plate, Argentina to Algeria for May 5-30 by CAM at $112.00/tonne

25,000 mt Soybean meal River Plate to Spanish Mediterranean June 5-10 at $115.00 Cargill FIO; 7Days

|Route and Vessel Size |Current Week |Change from previous week | Remarks |

| |U.S.D/MT | | |

|55,000 U.S. Gulf-Japan | $135.00 | Down $5.00 | 46,000 ton Handymax |

| | | |At $139.00 per tonne |

|55,000 PNW- Japan | $78.00 | Up $5.00 | Handymax at $82.00 |

|55,000 U.S. Gulf - China | $134.00 | | North or South China |

|25,000 U.S. Gulf- Veracruz, México | $38.00 | |3,000 MT daily discharge rate |

|35-40,000 U.S. Gulf- Veracruz, México| $35.00 | |Deep draft and 8,000 MT per day discharge |

| | | |rate. |

|25/30,000 U.S. Gulf- East Coast | $43.00 | |West Coast Colombia |

|Colombia | | |$60.00-$61.00 |

|30,000 U.S. Gulf – Algeria | $102.00 | |6,000 mt daily discharge |

| |$108.00 | |3,000 mt daily discharge |

|55,000 U.S. Gulf -Egypt | $103.00 | | 55,000 -60,000 mt |

|60-70,000 U.S. Gulf – Europe | $70.00 | | |

|55-60,000 Brazil -China | $139.00 | | |

|55-60,000 Argentina-China | $136.00 | | |

|55,000 U.S. Gulf to Iraq | $200.00 -205.00 | | Umm Qasr*(Incl. War risk ) |

|55,000 PNW to Iraq |$160.00- $165.00 | | |

|25,000 U.S. Gulf to Morocco | $100.00 | |One port discharge. |

| | | |3,000 MT discharge rate |

U.S. Export Inspections for last week:

|USDA Grain Inspections for Export Report |

|Last Week | | |  | | |  |

|(000 Bushels) |YC |% |WC |% |Sorghum |% |

|  |  |  |  |  |  |  |

|Gulf |22,909 |60% |132 |56% |1,521 |100% |

|PNW |10,895 |28% |0  |  |0 |0% |

|Lakes |0 |0% |0  |0%  |0  |0%  |

|Atlantic |24 |0% | 0 |0%  |0  |0%  |

|Interior Export Rail |4,597 |12% |104 |44% |0 |0% |

|Total (mil. Bushels) |38,401 |100% |236 |100% |1,521 |100% |

|Metric Tons |975,387 | |5,994 | |38,633 |MT |

|White Corn Shipments: |  |  |  |  |  |

|  |96 |mt to Mexico | | | |  |

|  |96 |Total | | | |  |

|Sorghum Shipments: | | | | |  |

| |2,246 |mt to Spain | | | |  |

|  |2,246 |mt to Vanuatu | | | |  |

|  | | | | | |  |

|  |440 |mt to Mexico | | | | |

|  |4,932 |Total |  |  |  |  |

Containerized Grain Shipments:

|CONTAINER SHIPMENTS of GRAIN |

USDA Grain Inspections Report: |26-May-2008 | | | | | | | | |  | |  | | | | | | | | | | | | | |  | |Last Week |metric tons | | | | | | | | | | | |MT | |  |YC | |YSB | |W.C. | |SRW | |HRW | |HRS | |Barley |TOTAL | |Taiwan | | | | | | | | | | | | | |0 | |China | | | | | | | | | | | | | |0 | |Hong Kong | | | | | | | | | | | | | |0 | |Indonesia | | | | | | | | | | | | | |0 | |Malaysia | | | | | | | | | | | | | |0 | |Philippines | | | | | | | | | | | | | |0 | |Vietnam | | | | | | | | | | | | | |0 | |Singapore | | | | | | | | | | | | | |0 | |Japan | | | | | | | | | | | | | |0 | |South Korea | | | | | | | | | | | | | |0 | |Thailand | | | | | | | | | | | | | |0 | |Jordan | | | | | | | | | | | | | |0 | |Algeria | | | | | | | | | | | | | |  | |Australia |  | |  | |  | |  | |  | |  |  |  |0 | |Sub total |0 | |0 | |0 | | | |0 | | | | |0 | |  | | | | | | | | | | | | | |  | |USDA Corrections/Additions to last weeks report: | | | | | | | | | | |  | |  | | | | | | | | | | | | | |  | |Taiwan |79,761 | | | |152 | | | | | | | | |79,913 | |China Main | | | | | | | | | | | | | |0 | |Hong Kong |660 | | | | | | | | | | | | |660 | |Indonesia |3,836 | |15,676 | | | | | | | | | | |19,512 | |Malaysia | | |2,858 | | | | | | | | | | |2,858 | |Philippines | | |1,334 | | | | | | | | | | |1,334 | |Vietnam | | |8,083 | | | | | | | | | | |8,083 | |Japan | | |8,138 | | | | | | | | | | |8,138 | |South Korea | | |19,296 | | | | | | | | | | |19,296 | |Singapore | | | | | | | | | | | | | |0 | |Thailand | | |2,504 | | | | | | | | | | |2,504 | |Columbia | | | | | | | | | | | | | |0 | |Costa Rica | | | | | | | | | | | | | |0 | |Dominican Republic | | | | | | | | | | | | | |0 | |Ecuador | | | | | | | | | | | | | |0 | |Jamaica | | |3837 | | | | | | | | | | |3,837 | |Jordan | | | | | | | | | | | | | |0 | |Haiti |201 | | | | | | | | | | | | |  | |Vanuatu |  | |191 | |  | |  | |  | |  | |  |191 | |Sub total |84,257 | |57,889 | |152 | |0 | |0 | |0 | | |146,326 | |  | | | | | | | | | | | | |  |  | |Mt. Grand Total |84,257 | |57,889 | |152 | |0 | |0 | |0 | |  |142,298 | |Number of containers |3,663 |  |2,517 |  |7 |  |0 |  |0 |  |0 |  |  |6,187 | |

U.S. Barge Freight (Last Half of June 2008)

Illinois River freight is currently 460 % of tariff ($23.53/mt, or $ .60 per bushel for Corn).

Mid-Mississippi River freight is 460 % of tariff ($26.98/mt or $ .685 per bushel for Corn).

Upper-Mississippi River freight is 480 % of tariff ($32.75/mt or $ .83 per bushel for Corn).

Secondary Rail Car Freight Markets (For Car order placement Last Half June 2008)

BNSF Pool cars (Less than shuttle train size) are bid -$100/car and offered at +50/car.

110 car Shuttle car freight is now bid - $275/car against offers of -$225/car.

UPRR Pool cars are bid +50/car against offers of +$100/car.

UPRR Shuttle train cars are bid - 500/car against offers of -$300/per car.

Best Regards,

Jay O'Neil

O’Neil Commodity Consulting

785-410-2303 (cell)

785-532-2868 (office)

joneil@ksu.edu

*** The information in this market report is derived from sources believed

to be reliable and accurate but can not be guaranteed. All market data

is subject to change with market conditions and Traders opinions.

Please obtain market updates and reconfirm all values with your regular suppliers

before making any trading decisions based on this data.

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