Canada Markets

Grain movement off the Canadian Prairies has perhaps never been so critical. Cash flow to producers needs to be restored, commitments need to be met with customers and Canada's reputation restored, while only a tightening of supplies can lead to a narrowing of current basis levels (in other words an improvement in cash bids) so that producers can find both reasonable old-crop and new-crop marketing opportunities.

As of week 31 data, which includes the week ending March 9, the year-to-date average for grain unloaded at the Pacific Terminals of Vancouver and Prince Rupert, Churchill and Thunder Bay is 500,810 metric tonnes. This has ranged from a high of 783,568 mt in week 10 to a low of 255,893 mt in week 23.

Week 31 data includes a volume of 453,671 mt at the terminals listed, the lowest in three weeks and is below the average of the previous three weeks of roughly 468,000 mt.

The recent order announced by the Federal government would see weekly unloads total 1,000,000 mt, which would also include movement into the U.S. To better understand the magnitude of this volume, it would involve a doubling of the average volume moved this crop year to the four terminal locations. Also, The Western Producer reports that the weekly volume to the four terminal locations has not exceeded 800,000 mt since Aug. 1, 2011.

While the focus as of late has been West Coast terminals, plans are being made for eastern movement. The Manitoba government has confirmation from CP that movement to Thunder Bay will increase, although the thickest ice in 20 years will delay movement over the Great Lakes and the St. Lawrence River and excess terminal capacity will be limited. As well, the Port of Churchill, which begins its season in mid-July, will look to better utilize resources in order to handle a greater share next shipping season.

Meanwhile, the response from the railroads should be reason for alarm. CN CEO Claude Mongeau reported to Reuters that "it will take more than the summer, continue into the fall, into next year," when discussing the backlog.

We will watch weekly unloads closely as we move forward for signs of a response from the railroads.

What do you think of the proposed $100,000/day fine to be imposed by the Canadian government as a means of pushing the railways into action? Will this plan work? Watch for the upcoming DTN 360 Poll located at the lower right of your DTN Home Page.

Until then, we'd love to see your response to the current DTN 360 Poll focusing on the moisture situation in your area. How are current conditions? Thanks for your support!

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

(ES)

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