Canada Markets

With the decision whether to extend mandatory minimum grain volumes for Canada's two major railways just days away, Canada's Transport Minister Lisa Raitt has suggested that regulating grain movement by corridor is not presently on the table, according to an interview with The Western Producer. "I am not looking at the question of corridors at the moment" is her response on this issue.

The attached graph shows how all markets are not equal in the eyes of the railroads, when given the free hand to facilitate movement which best fits their plans or helps meets government mandates.

The blue bars on the chart represent the percent of the total unfulfilled demand attributed to each shipping corridor, or in other words cars the railways have failed to spot, based on cumulative data provided by the Ag Transport Coalition.

At first glance one would think the largest problem lies with movement to the Vancouver bulk terminals, with 12,292 railcars or 52.8% of the total 23,295 cars not spotted destined for this corridor. Put another way, this represents 10.7% of the total cars order for West Coast bulk terminal shipping (red bar), which is reported at 114,765 cars. The failure rate on this corridor is slightly higher than the overall 10.2% failure rate for all corridors combined, calculated by 23,295 cars not spotted out of a total of 227,544 cars ordered.

For contrast, we'll look at cars destined for movement into the U.S. and Mexico. The 3,816 cars ordered but not spotted over the first 30 weeks for southern shipping represents just 16.4% of the total number of unfilled orders, as seen by the blue bar. Perhaps more significant is that this volume represents 27% of the 14,119 cars ordered (red bar), with close to one-in-three cars ordered a no-show. This remains well above the average 10.2% failure rate across all corridors.

The Canadian Grain Commission's February Exports of Canadian Grain and Wheat Flour indicates cumulative licensed shipments of wheat to the United States through licensed channels at 574,900 metric tons, down 51.7% from the same period last year. At the same time, the USDA has forecast 1.9 million metric tons of imports for the crop year.

Similar data appears for durum. As of the end of February, 144,900 mt had been shipped to the U.S. through licensed facilities, down 50% from the year-ago volume. The USDA has forecast 1.5 mmt of durum imports for this crop year in its recent March report.

DTN 360 Poll

This week's poll asks the question whether you think that the government has achieved its stated objectives in the past year given its involvement in the rail shipping issue. You can weigh in on this week's poll which is found on the lower right of your DTN Homepage.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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