Canada Markets

Weekly shipping data reported by the AG Transport Coalition shows both of Canada's two major railways spotting in excess of 90% of the cars wanted for loading in the week wanted over each of the 12 weeks of this crop year. Week 12 data reports CN spotting 98% of the cars wanted for loading in the week wanted, while CP spotted 96% of the cars wanted. The trend for the current crop year is shown by the brown and blue lines on the attached chart. Over the first 12 weeks of the 2019-20 crop year, CN has spotted an average of 96.2% of the cars wanted in the week wanted for loading, while CP has averaged 95.5% of the cars wanted.

As of week 12, the unfulfilled shipper demand for the two railways is reported at a total of 1,490 cars, which consists of outstanding orders (142 cars), rejected cars (784 cars), cancellations (zero cars) and shortened supply (564 cars). This compares to a total of 3,535 cars reported for the same period in 2018-19 and a four-year average of 4,525 cars. The largest improvement is seen in outright cancellations, with 757 cars reported as cancelled by the railways in the first 12 weeks of 2018-19, while the five-year average is 1,311 cars for this period, which compares the current crop year at zero, or no cars cancelled in the first 12 weeks.

The Ag Coalition's tally of the shipper's demand for hopper cars shows demand continuing to trail both the 2018-19 crop year as well as the four-year average (2014-15 through 2018-19.) For example the week 12 cumulative demand reported is 95,169 cars over the 12 weeks. This number is 97% of the hopper car demand reported for the same period in 2018-19 while 92.5% of the four-year average.

The trend in this demand relative to historical values can be seen with the black line (current demand versus 2018-19) and the green line (current demand versus the four-year average.) It is interesting to note that this percentage has shown steady improvement over the past four weeks, now both showing the highest percentages seen over the 12 weeks of the crop year.

This situation has been partially made possible by aggressive deliveries on the part of producers. As discussed last week, producers have delivered 14.4509 million metric tons into the licensed handling system as of week 12, which is 1.5% higher than the same period in 2018-19 and 4.6% higher than the four-year average.

Shipping results to-date can be viewed as favourable ahead of the winter months, while a potential CN strike as early as 12:01 a.m. on Nov. 19 continues to threaten results as we move forward.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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