Canada Markets

Hopper Car Demand Wanes

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The brown line represents the weekly demand for hopper cars to load on the Prairies for 2020-21, while the blue line shows the first two weeks of 2021-22. The cumulative demand is down 57.2% from last year while 51.6% below the four-year average. (DTN graphic by Cliff Jamieson)

The brown line on the attached chart shows the weekly demand for empty hopper cars for loading on the Prairies, as reported by the AG Transport Coalition, a group of shippers representing a reported 90% of prairie grain moved.

The most recent high was seen in week 39 or the week ending May 3, when 10,049 cars were ordered for loading. This number then drifted to a low of 4,828 cars as of week 52, the last week of the 2020-21 crop year. We then switch to the blue line on the attached chart for 2021-22 orders, with 3,368 cars ordered for week 1 and only 2,894 cars ordered for week 2.

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Cumulative orders of 6,263 cars over two weeks are down 57.2% from last year and is down 51.6% from the four-year average. Tight ending stocks are partially behind this lack of demand for shipping, while despite harvest that is ahead of average pace on the prairies, this has not resulted in deliveries to the elevator.

As of week 2, or Aug. 15, producers have delivered 1.2846 million metric tons of all grains into licensed facilities. This volume is down 34.6% from the 1.9647 mmt delivered during the same period in 2020-21, while down 17.1% from the four-year average. The pace of harvest is ahead of normal, but a smaller crop will allow for a larger share of the crop stored on farm. Knock on wood, the early harvest also came off dry or close to it, also leading to less reliance on elevator drying services.

As of week 2, primary elevator stocks totaled 2.1903 mmt, down 11.8% from last year and 10.8% lower than the four-year average. This reflects 40.4% of the working capacity estimated by the Grain Marketing Program.

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

Follow him on Twitter @Cliff Jamieson

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