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Senior Advisor

Answer to Canadian shippong bottleneck?

Apparently it is oil. And apparently it is the shipping priority. Which makes the idea of rail car shortagesas a cause incomplete - even in the face ofa large crop. You cant store a crop in hopper cars.

Year over year increase in oil shipments this fall from Alberta and elsewhere is 34%. I am not making a.case for the.renewal of the CWB but they WOULD have been howling bloody murder!

The Canadian farmer is on his own! Welcome.to the new world!
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10 Replies
Advisor

Re: Answer to Canadian shippong bottleneck?

The answer is chemfallow or going south with the wheat... Bins/capture carry.

I thought I read that cad is now 89cents. Big money there.

Right now, we are capturing carry on corn that may net close to 1.40 by end of year. At this point you got to build bins or quit. No more off the combine for some crops.
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Contributor

Re: Answer to Canadian shipping bottleneck?

I don,t think the bottleneck is caused by using them for storage.Yes bins are good to have.They have helped us to get our crops out faster plus we didn,t pay storage fees.Generally it also helpsus do delivery in slower times.

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Veteran Contributor

Re: Answer to Canadian shippong bottleneck?

Here in North Dakota we are seeing railroad busy with shipping crude oil fromj Bakken. Rail beats pipeline costs in shipping hard to believe and we need to get extra pipelines built to export product too. Also seeing alot of Canadian trucks dumping here at local elevators cann't help but wonder were going to see bottlenecks here too.

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Senior Advisor

Re: Answer to Canadian shippong bottleneck?

What I was trying to say is that rr cars filled w/ grain that are not moving and returned to be refilled quickly is like storage. The shortage of hopper cars can be an illusion if the cars that exist aren't being cycled quickly. If oil is a higher priority then more hopper cars really wouldn't be a solution unless there are more engines and the ability to move more trains. But if oil is the priority then it won't matter. Grain will still sit.
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Senior Contributor

Re: Answer to Canadian shippong bottleneck?

this isn't anything  will cure itself  or slow  mkting.

 

it is cearish,,, if not now  more to go later.

 

Bakken Southforks black  shale are producubg GROSSE  quantities of crude.

 

MT  ND as  well.

tanker cars  get long  way up in value

 

GATX  is one

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Advisor

Awash in oil

is what it sounds like to me.  Burdonsome supplies worldwide.  Kind of like wheat and corn.   Gee....shouldn't oil be trading at 50% of it's value?   hmmmm....just saying.

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Veteran Advisor

Re: Awash in oil

Good point BF, but:

Cheaper energy = faster economic growth.

Faster economic growth = more fuel demand.

More fuel demand = more ethanol required for blending.

More ethanol usage means people will be screaming about higher food prices.

Just trying to get us in trouble again aren't ya!! Smiley LOL

 

What is the break-even for Bakken oil nowadays?

How low can oil prices go before they start idling wells?

Will have to do a little research.

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Senior Advisor

Re: Answer to Canadian shippong bottleneck?

Global wheat supplies are are somewhat above last yearand less than the two years before. Does that square with 'burdensome' supplies? It certainly is the current psychology however.

Everything rests on the outcome of the global winter wheat crop. Or for that matter, corn and beans
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Veteran Contributor

Re: Answer to Canadian shippong bottleneck?

were in information cycle with traders believing what computer says is fact and just in time delivery for products is going to continue to work. The market keeps getting more and more confident in getting inventories tighter based on past experience that they made it through with these inventories and even if they get tighter they still will meet demand. Us farmers out in field have experienced that best layed plans do not always work the way you think when crop you thought was there disappears with single event.  This may be argued that on large scale this won't happen because it will average out over the nation. I just remember back in 83 when corn crop disappeared nationally in last few weeks of season and caugth many grade traders off guard. I have said on this sight were heading down this path sooner or later when supplies will not meet what has been traded there's going to be blood bath and possible shut down of whole futures system when inventory can not be found to cover futures contracts or cost breaks traders trying to cover these contracts.  To meet demand on ever tightening supplies the harder the correction will be and longer persists is going to make it much encompassing to the trade. 

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