CN said service resumed Dec. 5 after crews worked around the clock on the Vancouver-Kamloops corridor, which was first cut by landslides and washouts caused by torrential downpours in mid-November.

The country’s largest railroad operator restored limited activity along the vital supply link late last month before opting to close the line again as more storms triggered further mudslides and debris.

The damage to tracks and cars in dozens of spots followed floods that have caused bottlenecks for imports and exports on the West Coast.

The restored connection will allow freight to flow to and from the Port of Vancouver and begin to clear the massive backlogs of incoming shipping containers and outgoing grain.

The repaired lines will also allow Canadian Pacific Railway Ltd., which shares tracks with CN through part of the Fraser Valley, to boost its shipments.

End of year is a critical time for shipment of grain—canola and wheat in particular—with the bulk of Canadian grain transported via rail to B.C. ports.

“There are a few trains that are trickling through, but we don’t have rail movements up to where we need them to be,” said Wade Sobkowich, executive director of the Western Grain Elevator Association. “As far as a natural disaster goes, this is probably the most significant event … to the rail lines in our collective memory.”

Many farm deliveries to grain elevators have halted entirely as storage bins fill up and stakeholders await more detailed plans from the railways, Sobkowich said.

The backlog of Prairie grain may lose much of its value if trains can’t ship it to port before spring, when prices typically drop amid heightened global supply, according to his association.

Contract extension penalties and demurrage fees—issued by a shipping line when freight exceeds the time allotted at a terminal—also present a threat for farmers and grain elevators trying to clear out brimming barns and silos.

“Regardless of when the traffic on the mainlines resume handling normal levels of traffic, the reverberations back through the grain supply chain in Western Canada (and all commodities) will be measured in months,” said Steve Pratte, policy manager at the Canadian Canola Growers Association.

Source: The Canadian Press

Analysts expect 14.2 billion bushels for the current marketing year, which is 325 million bushels less than projected in December and 1.1 billion bushels below initial projections for the 2020 crop, according to the USDA.

Corn stockpiles also are expected to fall. The USDA projects a decline of about 150 million bushels, which would lower stockpile inventory to 1.55 billion bushels. That is 1.2 billion bushels below last summer’s level. The decline was steeper than what analysts projected, according to The Wall Street Journal.

The shift in inventory led to a sharp rise in prices. On Jan. 12, corn futures rose by the maximum allowed by the Chicago Board of Trade to more than $5.17 per bushel. The price continued upward the following day.

The USDA also cut its soybean stockpile forecast and wheat stockpiles, which similarly caused those commodities to trade at their highest levels since 2014. Soybeans were above the $14 per bushel mark and wheat over $6.60 per bushel in mid-January.

Demand from China is also influencing the market. The country needs grains to rebuild hog herds after culling millions infected by African swine fever.

Source: Wall Street Journal