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Concern Grows Over Rail Shipping Disruptions

The current rail shipping disruptions are having negative long-lasting effects on Canadian farmers and on our reputation as a reliable exporter.
 
Canadian Canola Growers Association President and CEO Rick White says something needs to be done as we rely heavily on export markets.
 
“Now we see over 50-grain vessels that are waiting to be loaded off the west coast that's a direct result of some of these things culminating to where we are today. Demurrage charges will begin to mount, and they are right now, and there are about 20,000 rail car orders that remain unfilled, and that's a problem. The elevators are starting to fill up and with all those empty ships waiting that's customers waiting for their grain. Our reputation as a reliable supplier of grain is once again being in question, and our reputation around the world's being damaged.”
 
He says they sent a letter to the Prime Minister calling on him to take some decisive action to stem the negative effects on farm profitability and Canadian competitiveness.
 
Last year’s wet harvest, ongoing market disruptions, rail strikes, derailments, and blockades have been taking their toll on the ag sector over the past year.
 
White says it’s been a rough year, but we’ll get through this.
 
“ In particular, these blockades have been very, very disruptive, and it's going to take a long time for the railways to try and get caught up and try to regain fluidity of the systems and get this grain back out to those ships and customers waiting for it. It's going to take a long time to recover, even from short term, one-day blockades are very problematic.”
 
He says when it comes to the Chinese market situation there’s not much new, noting that with the coronavirus it’s harder to reach Chinese officials and regulators because a lot of them are not in or working remotely from home.
 
Agriculture Minister David Marit just returned home from a trade mission to the United Arab Emirates, Bangladesh and India.
 
Using one example out of the United Arab Emirates, he says, the blockades here cause rail delays in getting products to port and to our customers.
 
“They have their shipments coming in, they have everything timed, and they're usually working on a 20-day cycle. Ships coming in and things like that. So if it gets delayed by 10 or 15 days it pushes everything back and then they start running out of supply.”
 
He notes it’s also a hardship for our farmers who are trying to sell their grain.   If terminals are not getting the trains then their full and can’t accept new deliveries.
 
Anti-pipeline blockades have been blocking CN Rail Lines in some parts of the country.
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Agricultural Market Update: Grain Prices, Crop Conditions, and Weather Impacts

Welcome back to our channel where we provide comprehensive updates on the latest trends and changes in the agricultural sector. This week, we're looking at significant movements in grain prices, crop conditions, and the effects of weather patterns. Let's dive into the details:

Grain Price Decline Grain prices have fallen to their lowest levels since 2020, with December corn down 4.3% and November soybeans losing 3.1%. This decline is partly due to the beneficial moisture brought by Hurricane Beryl to the Midwest, which has improved crop conditions significantly. The USDA reported that corn and soybean crops are in their best condition in four years, contributing to the downward pressure on prices.

Record Short Positions and Market Sentiment Fund traders have increased their net short positions in the corn market to a record level, with a net short of 347,000 contracts of corn. This reflects a bearish sentiment in the market, further influencing grain price dynamics. Similar selling trends were observed in soybeans and SRW wheat, indicating broad market caution.

Weather Impact and Forecast Hurricane Beryl has brought significant rainfall across Arkansas, Missouri, western Tennessee, western Kentucky, and southern Illinois, with more expected over Missouri, Illinois, and Indiana in the coming days. Despite this, the market is currently more focused on the moisture benefits rather than potential heat risks forecasted in the 6-10 and 8-14 day periods.

US Crop Conditions Corn and soybean conditions have shown slight improvements last week, with corn rated 68% good to excellent and soybeans at 68%. These are among the best ratings for this time of year since 2020, suggesting robust crop health that could continue to influence grain prices.

Winter Wheat Harvest and Spring Wheat Conditions The US winter wheat harvest is progressing well, ahead of schedule with significant portions already harvested in Kansas and Texas. Spring wheat conditions are also favorable, with 75% rated good to excellent, although there have been some declines in states like Idaho, South Dakota, and Washington. Brazil's Corn Harvest and US Exports Brazil's second corn crop harvest is advancing rapidly due to favorable hot and dry conditions, with 63% of the crop already harvested. Meanwhile, US corn shipments saw a substantial increase last week, indicating strong export demand, which contrasts with the recent drop in domestic grain prices.

Ongoing Developments Lastly, the USDA reported a flash sale of corn, with significant quantities sold to unknown destinations, scheduled for delivery over the next two marketing years. This could signal ongoing international demand for US corn despite lower prices.

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