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Grain-Ship Rates Cap 48% Monthly Jump on South American Cargoes

Returns for grain-carrying Panamax ships, the biggest vessels to navigate the Panama Canal, capped a 48 percent monthly jump on demand to haul South American farm products, according to RS Platou Markets AS.

Average daily earnings rose 3.1 percent to $7,917, the highest since Nov. 29, figures from the Baltic Exchange in London showed today. The gain was the 17th in a row, the longest winning streak since October 2011. This month’s increase was the largest since last October.

The South American grain season is lifting ship rates, Oslo-based investment bank Platou said in an e-mailed report today. Combined soybean production in Brazil and Argentina will rise 28 percent as the corn crop gains 5.9 percent, the U.S. Department of Agriculture said Feb. 8. Brazil is poised to pass the U.S. as the world’s biggest soybean exporter.

“The grain season is expected to be strong, given bumper crops,” Platou said. Demand for ships “has been strong this week, lifting rates up to as high as $15,000 per day,” it said.

Panamaxes are the second-biggest vessel type tracked by the Baltic Dry Index (BDIY), a broader measure of raw-materials shipping costs. Today the gauge climbed 1.6 percent, the most in almost six weeks, to this month’s high of 757. That narrowed February’s drop to 0.4 percent.

Daily average returns for Capesizes, the largest commodity carriers, slid 3.8 percent to $4,278, according to the exchange. That was the 15th straight drop, leaving rates down 43 percent for the month.

Supramaxes that are about 25 percent smaller than Panamaxes added 2.5 percent to $7,984, exchange figures showed. Handysizes, the smallest ships in the index, increased 2.4 percent to $6,500.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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