Wheat futures drop on potential for Canada railway strike
by Bloomberg Aug 21, 2024
Wheat prices fell as the threat of a rail strike in Canada prompted farmers to sell the grain ahead of any transport disruptions.
Futures dropped as much as 2.4% in Chicago, the biggest intraday loss since Aug. 5.
Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. plan to lock out more than 9,000 workers from the Teamsters Canada Rail Conference just after midnight. Prime Minister Justin Trudeau is urging Canada’s two largest railways and unionized workers to reach a deal to avert a strike.
More than 90% of grain moves by rail in Canada, one of the world’s top exporters. The nation is expected to ship about 25.3 million tons in the 2024-25 marketing year.
While Chicago futures are falling now, prolonged disruptions could end up supporting prices.
Spring wheat shipments from Canada’s west coast ports will be compromised if the strike takes place, which could drive buyers to turn to the US for supplies, especially if the stoppage lasts more than a few days, according to The Hightower Report.
“A switch of demand from Canada to US would be potentially bullish for wheat prices,” said Victor Martins, a risk manager at brokerage firm Amius Ltd.
Bloomberg
© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).
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