CN, CP hit record Q3 grain shipments

MONTREAL — Canada’s two main railways notched another record-setting quarter for grain shipments, benefiting from strong global demand, a bumper crop, efficient cars and more capacity due to smaller hauls of other products amid the COVID19 pandemic.

Canadian National Railway Co. said it moved 7.76 million tonnes of grain in the third quarter and 2.81 million in September alone, both new records for the time periods that amount to seven straight months of unprecedented volume.

Canadian Pacific Railway Ltd. reported moving 7.72 million tonnes in the quarter ended Sept. 30, 11 per cent more than its previous third-quarter record of 6.97 million tonnes set in 2014 as it marked the fourth consecutive quarter of record grain volumes.

Canadian grain remains in high demand as shippers try to feed a growing appetite from mills and governments seeking to shore up staple reserves amid the pandemic.

Grain exports rose 26 per cent year over year in August, reaching 3.62 million tonnes. Particularly hot are wheat, canola and barley — the latter two have big markets for beer-making and canola oil-processing in China and Indonesia, respectively.

“It was global demand that drove that strong pace of grain movement,” said David Przednowek, director of sales and marketing for bulk at CN.

“Due to COVID-19, countries are primarily concerned about food,” said Wade Sobkowich, head of the Western Grain Elevator Association. “If you understand Maslow’s hierarchy of needs, you need food before you need new clothes.”

Robust volume is set to continue apace as the country comes into a harvest season generally untainted by bad weather in Western Canada.

Agriculture and Agri-Food Canada expects grain production to rise four per cent in 2020-21.

“We therefore expect a record Canadian crop to drive growth at both in rails in 2021 while also providing stability in an uncertain macro environment,” Royal Bank of Canada analyst Walter Spracklin said in a research note this week.