Grain Cargoes Seen Slowing Most in 19 Years on Drought: Freight

The worst U.S. drought in more than a half century and dry weather from Europe to Australia will mean the biggest contraction in grain cargoes for 19 years and unprofitable rates for owners of Supramax commodity carriers.

Global trade in grains will drop 4.9 percent in the 2012-13 marketing year, according to the U.S. Department of Agriculture. Forward freight agreements, handled by brokers and used to bet on future costs, anticipate a fourth-quarter rate of $9,117 a day, 17 percent less than now, Baltic Exchange data show. Shares of Eagle Bulk Shipping Inc., the largest U.S. operator of the vessels, will slump 30 percent in the next 12 months, according to the average of six analyst estimates compiled by Bloomberg.