US soybean exports traditionally begin to surge in October of every year, which marks the start of US peak grain season. This year, however, the dry bulk market will benefit much less from the traditional surge in US soybean cargoes that normally come flooding into the market. While it is too soon to tell just how much the US soybean (and also wheat and corn) harvests will be affected by the ongoing drought, a much smaller amount of grain cargoes will surface this year during upcoming US peak grain season.

US soybean exports normally undergo a very large seasonal surge beginning in October of every year. During May to September of every year, US soybean exports typically average between 1 to 2 million tons. Harvest yields traditionally cause US soybean exports to then surge to around 6 million tons in October. The peak season surge continues for three additional months, with exports typically ranging between 4 and 5.5 million tons in November, December, and January.

This year, however, a much smaller surge in soybeans exports is likely to occur due to the drought that is raging on across much of the United States. It remains too soon to estimate just how low US soybean (and wheat and corn) exports will decline to this year, but a decrease in exports will occur and will put additional pressure on panamax and supramax rates.

US wheat exports traditionally experience their own surge in September as well. Excluding September, US grain exports normally average around 2.25 million tons every month. Harvest yields usually cause US wheat exports to surge to around 3 million tons in September however. This year, though, a much smaller surge in US wheat exports is also likely to occur.

The dry bulk market normally benefits from an increase in US wheat cargoes coming to the market in September, followed by a surge in US soybean cargoes coming to the market during October through January. Without these additional US grain cargoes coming to the market, prospects for panamax and supramax rates have become worse.