CN Rail is predicting a rebound in grain shipments after a bad Canadian harvest last year—a 48% year-over-year increase in the tonnes of grain moved for the current crop year, in fact.
Catch-up: This past crop year, CN Rail moved ~39% less grain than the year before thanks to smaller yields (Canadian wheat production dropped ~40% between 2020-2021 due to droughts across the Prairies and an extremely cold winter) and supply chain issues.
- Canada is the fourth-largest global supplier of wheat, with rail systems involved in shipping 94% of it to global markets.
What happened: A rainy spring bolstered Canada’s wheat production as acres of farmland increased to their highest levels in a decade, according to Statistics Canada. To capitalize on increased yields, CN Rail is expanding its fleet and adding 1,000 cars.
A US Department of Agriculture report predicted that, after supplying 7.7% of global wheat exports in 2021, Canada could be responsible for up to 12% in the coming year.
Why it matters: Even if Ukrainian ports stay open (a big if), other contributors will have to help pick up the slack, per The New York Times. One trader told Bloomberg that Canada’s increased yields would play a major role in offsetting global wheat shortages.