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Marketing Plan, Railroad Transport, Markets & Rain Days Update 03/21/2022

On Sunday, Canadian Pacific (CP) locked out 3,000 employees over a labor dispute. CP is the 2nd largest railroad in Canada, with service extending as far south as Kansas City.


Nutrien warned that it would need to reduce potash production if the shutdown were to last more than a few days; the statement came as fertilizer prices in the US hit record levels.


Intermodal transport (ocean freight containers) accounts for ~40% of CP carloads year to date, followed by grain (13%), energy (12%), coal (11%), and potash (5%).


Crude oil by rail has fallen 67% from pre-pandemic levels two years ago; however, rail barrels still deliver ~130,000 barrels per day of heavy oil to US refineries. A sustained reduction in availability could support US oil prices while pressuring Alberta hub pricing.


Around 12% of US coal imports come from Canada on CP.

 

For two years now we have used a weekly analysis of corn, wheat and soybeans to determine our recommendation of sell or don’t sell. We put equal value on the seasonal trend, technical outlook, the fundamental outlook, and profitability. It has worked pretty well. Things change, therefore, the market outlook changes. Pricing futures at a target price will always leave money on the table because one will sell too early and too low or one will not get anything sold.

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