Canadian Pacific (NYSE: CP) and CN (NYSE: CNI) crushed grain volumes in October, with shipments exceeding all-time records as export demand and new assets drove volumes higher.
CP hauled 3.04 million metric tonnes (MMTs) in October, crossing the 3 MMT threshold and exceeding the previous all-time record set in April by 6.9%. Compared to October 2019, volumes of grain and grain volumes were up by 14.2%.
“CP’s customers are managing strong and healthy supply chains to the ports, where new and expanded terminal capacity is facilitating very strong flows of grain,” said Joan Hardy, CP vice president of sales and marketing for grain and fertilizers.
Meanwhile, CN said Friday that it expected to exceed the 3 MMT threshold in October, beating a previous record of 2.88 MMT in October 2019. October’s record follows seven record months of Canadian grain movements from March through September, CN said.
The record grain hauls come amid projections that Canada will export higher volumes of wheat and coarse grain during the 2020-21 grain year, according to the latest U.S. Department of Agriculture’s World Agricultural Supply and Demand Estimates report.
The report estimates that Canada will export 25 MMT in 2020-21, compared with 24.38 MMT in 2018-19 and 24.63 MMT in 2019-20. Coarse grain exports are expected to total 5.7 MMT, compared with 5.97 MMT in 2018-19 and 5.05 MMT in 2019-20.
Meanwhile, other indicators have pointed to stronger export grain demand for the calendar year. The Port of Vancouver said in September that for the first six months of 2020, it handled a record 16.3 MMT of bulk and containerized grain, which is 10.4% higher year-over-year. Wheat volumes rose 7.5%, canola volumes grew 25.6% and specialty crops increased 10%.
Both CP and CN have invested heavily in their grain export networks, with CP committing in 2018 to purchase 5,900 new high-capacity hopper cars that can carry 15% more grain and 10% more weight and CN acquiring 1,500 new jumbo hopper cars that can carry 10% more grain than older cars. CN had also ordered another 1,000 grain cars in 2018.
“CP’s record-setting performance has enabled us to support the investments we have made in our grain-handling network, which includes port terminals on the east and west coasts,” said Darwin Sobkow, chief operations officer of agribusiness company Richardson International.
Grain shippers have also been investing in their infrastructure to take advantage of the increased business. For instance, Canadian producer G3 opened two new grain elevators in Alberta in June, and the elevators have high-efficiency infrastructure that enables trains to load up to 150 cars quickly using loop tracks. G3 has additional grain elevators under construction in Alberta and Saskatchewan. It also opened the G3 Export Terminal at the Port of Vancouver in July.
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