Canada Markets

Week 14 data from the Ag Transport Coalition, which covers 90% of the grain originating in Western Canada, shows both railways performing well, spotting a combined 92% of the cars wanted for loading during the week, with CN supplying 91% of the cars ordered and CP spotting 93% of the cars wanted during the week wanted.

The report reminds us of the challenges faced in the 2017-18 crop year, with CP spotting 90% of the cars wanted during the same week, while CN spotted 59%, a weekly percentage that would eventually fall to just 17% in both weeks 29 and week 30.

While cumulative hopper car demand is slightly lower as of week 14, railways have combined to do a far superior job in executing, while also breaking records in crude oil shipments at the same time. As of week 14, the coalition reports demand of 116,639 cars, which is down 7,815 cars or 6.3% from the same period last crop year, likely tied to the lengthy harvest experienced this fall.

At the same time, the total unfulfilled demand is shown at 3,600 cars, down sharply from the 8,676 cars reported for the same week last crop year and the lowest number reported for week 14 in four years of data reported by the Ag Transport Coalition. This unfulfilled demand is defined as a combination of outstanding orders, rejected cars, railway cancellations, shortened supply and denied orders. As seen on the attached chart, the black line represents the cumulative trend in unfulfilled demand for the current crop year, which compares to the 2017-18 trend or blue shaded area that reached a high of 32,794 cars in week 39 of 2017/18. A look at that week's report highlights a cumulative 22,243 cars cancelled by CN as of that week, a drag on grain movement that backed up grain on the Prairies and cost producers billions of dollars.

At 772 cars as of week 14, CN's outright cancellations are eight times that of CP's, while this time last year CN's cancellations of 5,255 cars were 52.5 times that of the number reported by its major competitor.

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