· Analytic
Z3758 Grain Transport Cost Composite
The equal-weighted z-score composite of five USDA AMS Grain Transportation Report cost components: diesel, rail, river barge, ocean-Gulf, and ocean-PNW. The empirical state-to-corn-forward-return direction is OPPOSITE the naive "high transport cost compresses margins" author thesis , expensive transport has historically PRECEDED bullish corn forward returns.
Current reading
-0.751
Moderate Neg
DAILY · SIGNAL
As of Oct 30, 2026. Updated nightly.
Current composite
-0.8244
On the plus-or-minus one scale; transport costs significantly above 52-week rolling mean
Signal state
Moderate NEG
179 consecutive days in episode
All-time percentile
12.1th
Bottom-quintile of 36 years
EXTREME_NEG corn fwd 60d
+4.07%
2,134 days (23.8%), HAC t +5.13 sig at 1%
EXTREME_POS corn fwd 60d
-4.29%
1,989 days (22.2%), HAC t -5.69 sig at 1%
Current contribution to ML Auto Corn Composite V9
+0.051
6.2 percent weight × -1 polarity × -0.824 value
OBJECTIVE
The USDA Agricultural Marketing Service Grain Transportation Report is a weekly publication tracking the five modes that move US grain from the country elevator to the export terminal: on-farm diesel (truck haul from field to elevator), rail (country elevator to interior terminal), river barge (interior terminal to Gulf export elevator), ocean-Gulf freight (Gulf export to overseas destination), and ocean-Pacific-Northwest freight (Pacific-Northwest export to overseas destination). This signal takes the five weekly cost series, individually z-scores each on a 52-week rolling window, averages the five z-scores equal-weight, and converts to daily with 30-day rolling smooth. The author’s intended polarity is inverted (`sign=-1.0`): HIGH transport cost compresses farmer margins so is intended as BEAR corn, mapped to NEGATIVE signal value. Here is the twist. Across 36 years of empirical history the state-to-corn-forward-return direction runs OPPOSITE the author thesis. EXTREME_NEG state (val below minus 0.5, which under the inverted mapping corresponds to HIGH transport cost regimes) delivers mean corn fwd 60d of plus 4.07 percent (HAC Newey-West t plus 5.13, significant at the 1 percent level, 2,134 state-days). EXTREME_POS state (val above plus 0.5, low transport cost) delivers minus 4.29 percent (HAC t minus 5.69, significant at the 1 percent level, 1,989 state-days). Both tails highly significant and in OPPOSITE direction to the author thesis. The economic interpretation: high transport cost regimes typically coincide with strong demand (export flows active, which draws up barge rates) and periods of global growth and food-price inflation , the forward-return window captures the continued corn-rally dynamic. Low transport cost regimes signal demand softness (export program flagging) which the forward-return window captures as corn weakness. ML Auto Corn Composite V9 wires the signal at polarity sign minus one, which EFFECTIVELY DOUBLE-FLIPS the author’s inverted output back into alignment with the empirical direction: expensive-transport current reading (val -0.82) contributes positively to ML Auto Corn Composite V9 (minus 0.82 × minus 1 × 0.0619 = plus 0.051), correctly reflecting the empirically-bullish-for-corn regime. The signal reads minus 0.8244 as of October 23 2026, in EXTREME_NEG territory for 179 consecutive trading days at the 12.1 percentile of 36 years , grain transport costs have been running significantly above their 52-week rolling means through most of 2026, consistent with elevated diesel prices + active rail/river volumes + strong Gulf export demand.
LIVE CHART
Thirty-six years of USDA AMS Grain Transportation Report 5-component weekly cost composite.
COMPOSITE
-0.8 / 100
STATE
Moderate Neg
PHASE
-1
FWD 60d
+0.70% (baseline +2.31%)
SAMPLE N
9,039 days
TODAY’S PLAYBOOK READING
STATE
Moderate Neg
STATE AND PERCENTILE
EXTREME_NEG at the 12.1 percentile , bottom-quintile of 36 years.
WHY THE SIGNAL IS HERE
Elevated 2026 diesel + strong rail + river + Gulf export freight have pushed the composite well above the 52-week rolling mean.
POSTURE FOR THE WEEKS AHEAD
EXTREME_NEG delivers plus 4.07 percent corn fwd 60d (HAC t plus 5.13 sig at 1 percent). The empirical pattern is strongly bullish from this regime.
WHAT THE CHART SHOWS
The composite sits at -0.75 in the Transport Costs Soft band. All five components (diesel, rail, barge, ocean-Gulf, ocean-PNW) are reading at or below baseline. Rolling 252-day IC vs CBOT corn fwd 60d is +0.574 at p=3.1e-18, strongly confirming the current regime’s contrarian signature. CBOT front-month corn (orange, right axis) sits near $4.48/bu.
TOP INPUTS FIRING
- Primary composite -0.75 State Transport Costs Soft, deep extreme band. Equal-weighted z-score composite across diesel, rail, barge, ocean-Gulf, ocean-PNW.
- Five-component equal-weighted USDA AMS transport cost composite Diesel (fuel), rail (interior transport), river barge (waterway), ocean-Gulf (US exports to Mexico/Caribbean), ocean-PNW (US exports to China/Asia). Equal-weighted.
- Rolling 252d IC vs CBOT corn fwd 60d: +0.574, p=3.1e-18 (CONTRARIAN confirmed) Strongly significant positive IC on recent 252d window. The CONTRARIAN interpretation is confirmed: soft composite in recent regime predicts positive corn fwd 60d.
THE TAKEAWAY
What this means for you today
THE CONTRARIAN DIRECTION IS EMPIRICAL FACT
Author thesis: high transport cost compresses farmer margins at the farmgate (farmer gets CBOT minus freight minus elevator-basis) → farmer less motivated to deliver → tight supply → bull corn. OR, high transport cost COMPRESSES exporter margins → export demand softens → bear corn. The author’s engine inversion suggests the latter interpretation was intended. The 36-year empirical direction runs OPPOSITE the author’s bear-corn thesis: EXTREME_NEG state (high transport cost under the inverted mapping) delivers plus 4.07 percent corn fwd 60d (sig at 1 percent), while EXTREME_POS state (low transport cost) delivers minus 4.29 percent (sig at 1 percent). Both tails highly statistically robust.
THE ECONOMIC INTERPRETATION OF THE EMPIRICAL DIRECTION
High transport costs typically coincide with (1) elevated oil + diesel prices (fuel-cost pass-through to all five freight modes), (2) active export flows that bid up river barge rates and PNW/Gulf ocean rates, and (3) global commodity super-cycles that lift ALL freight simultaneously. These three conditions historically coincide with corn-rally regimes (2008 pre-crisis food shock, 2010-2011 Russian ban + Arab Spring, 2022 Ukraine). The signal is DOWNSTREAM of the same macro conditions that drive corn forward returns positive. Low transport costs signal the OPPOSITE regime: oil collapse, pandemic-era demand destruction, trade-war-era export softness , all bearish for corn.
THE ML Auto Corn Composite V9 POLARITY FLIP ALIGNS WITH EMPIRICAL DIRECTION
ML Auto Corn Composite V9 wires the signal at polarity sign minus one. The polarity flip DOUBLE-INVERTS the author’s inverted engine output, bringing it back into alignment with the empirically-correct direction. Current reading minus 0.824 (expensive transport, bullish empirical regime) with polarity minus one yields a ML Auto Corn Composite V9 contribution of plus 0.051 , positive to the composite, correctly reflecting the empirically-bullish-for-corn regime.
THE REGIME MAP
The three transport cost composite regime states, forward returns and sample share
Behavior across the five-component grain transport cost composite (diesel + rail + barge + ocean-Gulf + ocean-PNW z-scores, equal-weighted). Full-sample Spearman IC minus 0.255: the composite reads CONTRARIAN against corn forward returns. Elevated transport costs reflect macro supply-chain inflation (headwind); soft transport costs reflect demand slack (precursor to oversold corn bounces).
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Transport Costs Soft TODAY | – | 28.8% (2603 d) | +0.55% | +0.26pp | Feb 2026, Jul 2025, Oct 2024 | |
| Transport Costs Neutral | 0 | 45.4% (4109 d) | +0.96% | +0.67pp | Jan 2026, Jul 2025, Mar 2025 | |
| Transport Costs Elevated | + | 25.8% (2332 d) | +0.98% | +0.69pp | Apr 2025, Nov 2024, Sep 2024 |
The historical pattern
Methodology
THE TRACK RECORD
State changes
| State | Start | End | Duration | Fwd 60d SPY |
|---|---|---|---|---|
| Extreme Pos | 10/23/2024 | 11/07/2024 | 12d | +4.92% |
| Normal | 11/08/2024 | 11/15/2024 | 6d | +0.43% |
| Extreme Neg | 11/18/2024 | 03/04/2025 | 72d | +3.97% |
| Normal | 03/05/2025 | 04/23/2025 | 35d | +1.09% |
| Extreme Neg | 04/24/2025 | 07/14/2025 | 55d | +15.03% |
| Normal | 07/15/2025 | 07/25/2025 | 9d | +8.19% |
| Extreme Pos | 07/28/2025 | 01/12/2026 | 117d | +5.39% |
| Normal | 01/13/2026 | 02/06/2026 | 18d | -2.06% |
| Extreme Pos | 02/09/2026 | 10/23/2026 | 179d | +5.75% |
Scroll inside the table for the full history. Forward 60-day SPY is measured from each run’s start date; a reader cannot trade off a start-date they only identify in hindsight, so this is a transparency log, not an alpha claim. Asterisked (*) returns are partial. The run is less than 60 trading days old. The full 60-day comparable fills in as more data arrives.
What this measures
The engine queries `fundamentals_data.USDA_AMS_GTR_TRANSPORT_COSTS_WEEKLY` for five cost columns: `diesel_price`, `rail_index`, `river_index`, `ocean_gulf_index`, `ocean_pnw_index`. Z-scores each on a 52-week rolling window with 12-week minimum. Averages the five z-scores equal-weight. Converts to daily via 30-day rolling smooth. Applies `sign=-1.0` polarity inversion (author intent: high cost = bear corn = negative signal). Tanh-bounds to the plus-or-minus one scale. Five-state machine on the final the primary composite.
GO DEEPER
Want the full depth?
The full research brief adds methodology detail on the five-component composite construction, why aggregate transport reads CONTRARIAN against corn forward returns (macro supply-chain inflation interpretation), and how component-level signals (Z4411 rail alone, Z4410 barge alone) differ. Includes four historical case studies anchored to macro-driven transport-cost regimes, the three-regime state-conditional table, and the methodology for pairing with component transport signals, Ending Stocks, and the Corn Cycle DNA playbook.
Taxonomy, polarity, state labels
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 02, 2026 12:26 PM ET