Gold erased this year’s gains after U.S. employers added more jobs in September than forecast, stoking speculation that the Federal Reserve will move closer to raising interest rates.
Futures for December delivery fell as much as 1.4 percent to $1,198.40 an ounce in New York, the lowest since Dec. 31 and falling below $1,200 for the first time this year. A decline in 2014 would cap the first back-to-back annual losses for the metal since 1998. Prices tumbled 28 percent last year, the most in three decades.
An accelerating American economy means investors are shunning gold even after the U.S. expanded sanctions against Russia and ramped up its military campaign to combat Islamic State in Iraq. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
“Strengthening payrolls are going to add to the perception that the Fed is going to raise rates sooner,” Charlie Bilello, who helps oversee $220 million as director of research at Pension Partners LLC in New York. “The perception is that a more hawkish Fed is negative for gold.” Gold futures for December delivery fell 1.1 percent to $1,201.40 an ounce at 9:02 a.m. on the Comex in New York. A close at that price would leave the metal down 0.1 percent this year.
The 248,000 gain in payrolls followed a 180,000 August increase that was bigger than previously estimated, the Labor Department said today. The median forecast of economists in a Bloomberg survey called for a 215,000 advance. The unemployment rate fell to the lowest level since July 2008.
Goldman View
Goldman Sachs Group Inc. said yesterday that a stronger U.S. economy is “driving” a bearish gold outlook, maintaining a forecast for prices to reach $1,050 in 12 months. More than $3.4 billion has been erased from the value of exchange-traded products backed by gold this year, and money managers are holding their smallest bullish bet since January.
“The key driver has been the more likely tightening of U.S. monetary policy, which has been reflected in the stronger dollar,” Robin Bhar, an analyst at Societe Generale SA in London, said yesterday. “Gold doesn’t earn any yield or return. Investors are becoming more disillusioned when it comes to gold.”
Assets in gold-backed ETPs reached the lowest since 2009 yesterday, data compiled by Bloomberg show. Inflation expectations, measured by the five-year Treasury break-even rate, are near the lowest since June 2013.
Brent Crude Heads For Bear Market Amid Swelling Supply
Brent crude headed for a bear market on speculation rising global supplies will be more than enough to meet slowing demand.
Prices fell for a fourth day after closing almost 20 percent below their June peak yesterday, a common definition of a bear market. OPEC September oil production rose to a one-year high and Saudi Arabia cut prices this week. U.S. output is near the most since 1986. The Bloomberg Dollar Spot Index climbed to a four-year high, reducing oil’s investment appeal.
“You are seeing pretty good growth in oil supply and that’s weighing on the market,” said Greg Sharenow, executive vice president at Pacific Investment Management Co., who helps manage $26 billion of commodity investments. “You have the strengthening dollar. And this has been a big part of how it’s been trading recently.” Brent for November settlement slipped $1.23, or 1.3 percent, to $92.19 a barrel at 12:44 p.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures traded was about 26 percent above the 100-day average. Prices have decreased 4.9 percent this week.
West Texas Intermediate crude for November delivery fell 88 cents, or 1 percent, to $90.13 a barrel on the New York Mercantile Exchange. It traded below $90 yesterday for the first time since April 2013. Prices have slipped 3.7 percent this week. The U.S. benchmark earlier fell to a discount of as little as $1.51 to Brent on ICE, the smallest gap since August 2013, before widening out.
Gasoline Drops
Gasoline futures dropped as much as 2.4 percent to $2.3505, the least since January 2011. A lower price for Brent can cut U.S. gasoline prices by reducing the cost of crude and fuel imports to the U.S. East Coast.
“I am looking for WTI to establish a floor possibly as low as $85, which could possibly take Brent to $88,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “The Brent-WTI spread would probably end up staying at $2 or $3. U.S. production is going to continue to increase.”
The Bloomberg Dollar Spot Index increased as far as 1,080.05. Output from the 12-member Organization of Petroleum Exporting Countries rose by 413,000 barrels a day to 30.935 million in September, a Bloomberg survey of oil companies, producers and analysts showed. That’s the highest level since August 2013. U.S. domestic crude production rose to 8.87 million barrels a day in the week ended Sept. 19, the most since March 1986, according EIA estimates.
Cut Price
Saudi Arabia reduced the price for Arab Light to Asia by $1 a barrel to a discount of $1.05 to the average of Oman and Dubai crude, the lowest since December 2008. Official selling prices, or OSPs, are regional adjustments Aramco makes to price formulas to compete against oil from other countries.
The International Energy Agency last month reduced its projections for demand growth this year and in 2015, citing a weakening economic outlook. Higher exports from Libya and booming U.S. production “deepened the overhang in crude markets,” the Paris-based IEA said.
“Supply is plentiful and demand is not keeping up with supply now,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “That’s the fundamental equation and it looks more likely that we’ll continue to go lower.”
Losing Confidence
Goldman Sachs Group Inc. said it’s losing confidence in its forecast that Brent will recover to $100 a barrel next year. While the bank is maintaining its projection for now, it says that a lack of signs of accelerating global economic growth and uncertainty over the Organization of Petroleum Exporting Countries’ production plans amid rising Libyan output are weakening its conviction.
The Brent-West Texas Intermediate spread shrank as a government report showed U.S. non-farm payrolls rose more than expected last month. Payrolls increased 248,000, the Labor Department reported. The median forecast of economists in a Bloomberg survey called for a 215,000 advance. “The jobs report is a blockbuster,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “It increases demand expectations here in the U.S.”
Port Hedland Iron Ore Shipments to China Decline From Record
Iron ore shipped to China from Australia’s Port Hedland, the world’s biggest bulk export terminal, declined from a record last month amid speculation demand may ease amid slowing economic growth.
Shipments were 29.8 million tons in September from a record 32 million tons in August and 23 million tons in September 2013, according to port authority data. Total exports declined to 36.3 million tons from a record 37.4 million tons in August and 29 million tons a year earlier, the data show. Port Hedland is part of the Pilbara Ports Authority.
Prices of the raw material used to make steel tumbled 41 percent this year as BHP Billiton Ltd. (BHP) and Rio Tinto Group expanded supplies, pushing the market into a glut just as demand growth slowed in China, the biggest buyer. Australia’s state forecaster cut its price estimates for 2014 and 2015 last month and predicted further closures of high-cost producers. “Steel demand has struggled to improve,” Kash Kamal, an analyst at Sucden Financial in London, said by e-mail. “With mills holding ample stocks of finished steel, buyers are unwilling to purchase significant quantities of iron ore.”
China’s economy will probably expand 7.3 percent this year, according to a Bloomberg survey of economists from Sept. 18 to Sept. 23, down from 7.4 percent in an August survey. China’s Purchasing Managers’ Index was at 51.1 in September, the same reading as in August, according to data from the National Bureau of Statistics and China Federation of Logistics and Purchasing.
Iron ore with 62 percent content at the Chinese port of Qingdao rose 0.9 percent to $79.60 a dry ton yesterday, according to data compiled by Metal Bulletin Ltd. Prices fell for a third straight quarter in the three months ended Sept. 30, the longest such streak on record.
Rail Jams Snarl Canada Grain Sales Even as Crop Shrinks
Even with a grain harvest falling below last year’s record, Western Canadian farmers can’t find enough rail cars in the right places to move their crops.
Wet, cool weather across parts of the Canadian prairies has reduced the amount of high quality grain available, helping to fuel another showdown between shippers and the nation’s largest railways. While the crop is 20 percent smaller than last year’s, it will be harder to find and move the right grades to match export sales. Grain shippers said railways haven’t been supplying enough cars, and about 24,000 orders for transport on the prairies haven’t been filled. Canadian National Railway Co. (CNR), facing a fine for failing to meet its minimum weekly grain shipping target, said farmers haven’t been delivering enough grain to country elevators to comply with the government order.
“The logistics become more complicated,” said Mark Hemmes, president of Quorum Corp., an Edmonton-based company hired by the federal government to monitor Canada’s grain transportation system. “I think the risk is just making sure you’ve got the right grain at the right place at the right time.”
Shortages of rail cars to move last year’s record wheat and canola crops left a backlog of as much as C$20 billion of grain stuck on prairie farms.
While total Canada crop production is forecast to drop by about 20 percent to 76 million tons from 97 million tons a year earlier, output remains 3.5 percent above the five-year average, the government said in a Sept. 18 report.
Rail Backlog
Wayne Bacon couldn’t find enough rail cars to ship last year’s bumper crop from his 6,500-acre farm in Kinistino, Saskatchewan. This year, he can’t move his smaller wheat harvest. “We haven’t moved any grain this year except for canola,” Bacon, 68, said in a telephone interview. “It just seems like we never got over that backlog.”
Grain elevators located on less-traveled rail lines are not getting enough cars to move crops, Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said in an Oct. 1 telephone interview. Some farmers are still unable to sell grain leftover from last year’s harvest due to the transport shortage, he said.
“They’re just frustrated,” Hall said. “They might be going into default and losing their sales.”
Companies may need to gather grades of grain from multiple locations on the prairies to fulfill sales orders, unlike last year when crop quality was consistent, Quorum’s Hemmes said. There were 16 partially-loaded ships waiting for grain in Vancouver as of Sept. 18, above the average of 8 to 10 vessels.
Wet Weather
Wet weather delayed seeding across parts of the prairies and harvest progress was slowed due to continued rain and below-average temperatures. Moisture, disease and frost have damaged crops in parts of Saskatchewan, Canada’s largest producer of spring wheat and canola, the province’s agriculture ministry said in a Sept. 25 report.
Some of Canada’s wheat crops have suffered damage from moisture and frost that can cause holes in bread or make a loaf collapse, Daryl Beswitherick, program manager for quality assurance at the Canadian Grain Commission, said in a Sept. 29 telephone interview. Canada is known for its high-quality milling wheat and foreign buyers may try to source grain from the U.S. or Australia to meet their needs, he said.
‘More Precise’
“The transportation system this year will have to be more precise,” Wade Sobkowich, executive director of the Winnipeg-based Western Grain Elevator Association, said in a Sept. 18 telephone interview. “What’s going to be more important is getting the grain from the precise locations to where we need them because of the crop quality issues we’re facing.”
The government announced in August that Canadian National Railway and Canadian Pacific Railway Ltd. (CP) would each be required to move 536,250 tons of grain a week between Aug. 3 and Nov. 29 or face penalties. A similar order was imposed in March to clear a backlog of grain on the prairies.
Canada decided to fine CN because the railway “was not able to meet the minimum volume requirements,” Jana Regimbal, a spokeswoman for Transport Minister Lisa Raitt said in a Sept. 17 e-mail. The government declined to disclose how much below the target CN was as the “details are commercially sensitive and therefore cannot be shared,” Regimbal said.
Canadian Pacific has met the volume requirements, she said.
Transparent Data
The railways are not meeting shippers’ needs and companies are struggling to meet sales demand to eastern Canada and the U.S., Sobkowich said. There is no transparent data available to assess whether railways are meeting the grain thresholds outlined in a government order, he said. “The fact that CN hasn’t complied with the order in certain weeks shows that the consequences for not meeting the order are not sufficient,” Sobkowich said.
Canada’s federal government should lower the shipment minimum because farmers haven’t been delivering enough grain to allow railroads to comply with the order, Canadian National Railway Chief Executive Officer Claude Mongeau said Sept. 22 in Montreal. Canadian Pacific has moved more grain this year than it ever has before and the railway continues to be positioned to move significant volumes of grain, spokeswoman Breanne Feigel said in a Sept. 30 e-mail.
“I’m not sure where CN is getting the idea that there isn’t grain to handle,” Agriculture Minister Gerry Ritz said in a Sept. 23 teleconference with reporters. The government expects the railway to “pick up their game,” he said.
Wheat Prices
Shares of Canadian National rose 27 percent percent this year through yesterday and Canadian Pacific jumped 46 percent. The price of wheat, Canada’s biggest crop, is down 20 percent in 2014 to $4.8275 a bushel on the Chicago Board of Trade as the U.S. Department of Agriculture predicts global harvests will rise to a record 719.95 million metric tons. Canola in Winnipeg tumbled 11 percent this year to C$398.20 a ton.
Farmers who contracted to sell higher quality wheat will have to sell at a discount, said Doug Chorney, a farmer and president of Keystone Agricultural Producers. That will put a dent in their income since many farmers spent more money this year on seed, fertilizer and propane to dry wet grain.
“It’s going to be a sad story for a lot of farms this year,” Chorney said. “That’s a lot of money out of pocket if you don’t grow a crop or you grow a crop you can’t sell.”
source: Bloomberg
Futures for December delivery fell as much as 1.4 percent to $1,198.40 an ounce in New York, the lowest since Dec. 31 and falling below $1,200 for the first time this year. A decline in 2014 would cap the first back-to-back annual losses for the metal since 1998. Prices tumbled 28 percent last year, the most in three decades.
An accelerating American economy means investors are shunning gold even after the U.S. expanded sanctions against Russia and ramped up its military campaign to combat Islamic State in Iraq. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
“Strengthening payrolls are going to add to the perception that the Fed is going to raise rates sooner,” Charlie Bilello, who helps oversee $220 million as director of research at Pension Partners LLC in New York. “The perception is that a more hawkish Fed is negative for gold.” Gold futures for December delivery fell 1.1 percent to $1,201.40 an ounce at 9:02 a.m. on the Comex in New York. A close at that price would leave the metal down 0.1 percent this year.
The 248,000 gain in payrolls followed a 180,000 August increase that was bigger than previously estimated, the Labor Department said today. The median forecast of economists in a Bloomberg survey called for a 215,000 advance. The unemployment rate fell to the lowest level since July 2008.
Goldman View
Goldman Sachs Group Inc. said yesterday that a stronger U.S. economy is “driving” a bearish gold outlook, maintaining a forecast for prices to reach $1,050 in 12 months. More than $3.4 billion has been erased from the value of exchange-traded products backed by gold this year, and money managers are holding their smallest bullish bet since January.
“The key driver has been the more likely tightening of U.S. monetary policy, which has been reflected in the stronger dollar,” Robin Bhar, an analyst at Societe Generale SA in London, said yesterday. “Gold doesn’t earn any yield or return. Investors are becoming more disillusioned when it comes to gold.”
Assets in gold-backed ETPs reached the lowest since 2009 yesterday, data compiled by Bloomberg show. Inflation expectations, measured by the five-year Treasury break-even rate, are near the lowest since June 2013.
Brent Crude Heads For Bear Market Amid Swelling Supply
Brent crude headed for a bear market on speculation rising global supplies will be more than enough to meet slowing demand.
Prices fell for a fourth day after closing almost 20 percent below their June peak yesterday, a common definition of a bear market. OPEC September oil production rose to a one-year high and Saudi Arabia cut prices this week. U.S. output is near the most since 1986. The Bloomberg Dollar Spot Index climbed to a four-year high, reducing oil’s investment appeal.
“You are seeing pretty good growth in oil supply and that’s weighing on the market,” said Greg Sharenow, executive vice president at Pacific Investment Management Co., who helps manage $26 billion of commodity investments. “You have the strengthening dollar. And this has been a big part of how it’s been trading recently.” Brent for November settlement slipped $1.23, or 1.3 percent, to $92.19 a barrel at 12:44 p.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures traded was about 26 percent above the 100-day average. Prices have decreased 4.9 percent this week.
West Texas Intermediate crude for November delivery fell 88 cents, or 1 percent, to $90.13 a barrel on the New York Mercantile Exchange. It traded below $90 yesterday for the first time since April 2013. Prices have slipped 3.7 percent this week. The U.S. benchmark earlier fell to a discount of as little as $1.51 to Brent on ICE, the smallest gap since August 2013, before widening out.
Gasoline Drops
Gasoline futures dropped as much as 2.4 percent to $2.3505, the least since January 2011. A lower price for Brent can cut U.S. gasoline prices by reducing the cost of crude and fuel imports to the U.S. East Coast.
“I am looking for WTI to establish a floor possibly as low as $85, which could possibly take Brent to $88,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “The Brent-WTI spread would probably end up staying at $2 or $3. U.S. production is going to continue to increase.”
The Bloomberg Dollar Spot Index increased as far as 1,080.05. Output from the 12-member Organization of Petroleum Exporting Countries rose by 413,000 barrels a day to 30.935 million in September, a Bloomberg survey of oil companies, producers and analysts showed. That’s the highest level since August 2013. U.S. domestic crude production rose to 8.87 million barrels a day in the week ended Sept. 19, the most since March 1986, according EIA estimates.
Cut Price
Saudi Arabia reduced the price for Arab Light to Asia by $1 a barrel to a discount of $1.05 to the average of Oman and Dubai crude, the lowest since December 2008. Official selling prices, or OSPs, are regional adjustments Aramco makes to price formulas to compete against oil from other countries.
The International Energy Agency last month reduced its projections for demand growth this year and in 2015, citing a weakening economic outlook. Higher exports from Libya and booming U.S. production “deepened the overhang in crude markets,” the Paris-based IEA said.
“Supply is plentiful and demand is not keeping up with supply now,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “That’s the fundamental equation and it looks more likely that we’ll continue to go lower.”
Losing Confidence
Goldman Sachs Group Inc. said it’s losing confidence in its forecast that Brent will recover to $100 a barrel next year. While the bank is maintaining its projection for now, it says that a lack of signs of accelerating global economic growth and uncertainty over the Organization of Petroleum Exporting Countries’ production plans amid rising Libyan output are weakening its conviction.
The Brent-West Texas Intermediate spread shrank as a government report showed U.S. non-farm payrolls rose more than expected last month. Payrolls increased 248,000, the Labor Department reported. The median forecast of economists in a Bloomberg survey called for a 215,000 advance. “The jobs report is a blockbuster,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “It increases demand expectations here in the U.S.”
Port Hedland Iron Ore Shipments to China Decline From Record
Iron ore shipped to China from Australia’s Port Hedland, the world’s biggest bulk export terminal, declined from a record last month amid speculation demand may ease amid slowing economic growth.
Shipments were 29.8 million tons in September from a record 32 million tons in August and 23 million tons in September 2013, according to port authority data. Total exports declined to 36.3 million tons from a record 37.4 million tons in August and 29 million tons a year earlier, the data show. Port Hedland is part of the Pilbara Ports Authority.
Prices of the raw material used to make steel tumbled 41 percent this year as BHP Billiton Ltd. (BHP) and Rio Tinto Group expanded supplies, pushing the market into a glut just as demand growth slowed in China, the biggest buyer. Australia’s state forecaster cut its price estimates for 2014 and 2015 last month and predicted further closures of high-cost producers. “Steel demand has struggled to improve,” Kash Kamal, an analyst at Sucden Financial in London, said by e-mail. “With mills holding ample stocks of finished steel, buyers are unwilling to purchase significant quantities of iron ore.”
China’s economy will probably expand 7.3 percent this year, according to a Bloomberg survey of economists from Sept. 18 to Sept. 23, down from 7.4 percent in an August survey. China’s Purchasing Managers’ Index was at 51.1 in September, the same reading as in August, according to data from the National Bureau of Statistics and China Federation of Logistics and Purchasing.
Iron ore with 62 percent content at the Chinese port of Qingdao rose 0.9 percent to $79.60 a dry ton yesterday, according to data compiled by Metal Bulletin Ltd. Prices fell for a third straight quarter in the three months ended Sept. 30, the longest such streak on record.
Rail Jams Snarl Canada Grain Sales Even as Crop Shrinks
Even with a grain harvest falling below last year’s record, Western Canadian farmers can’t find enough rail cars in the right places to move their crops.
Wet, cool weather across parts of the Canadian prairies has reduced the amount of high quality grain available, helping to fuel another showdown between shippers and the nation’s largest railways. While the crop is 20 percent smaller than last year’s, it will be harder to find and move the right grades to match export sales. Grain shippers said railways haven’t been supplying enough cars, and about 24,000 orders for transport on the prairies haven’t been filled. Canadian National Railway Co. (CNR), facing a fine for failing to meet its minimum weekly grain shipping target, said farmers haven’t been delivering enough grain to country elevators to comply with the government order.
“The logistics become more complicated,” said Mark Hemmes, president of Quorum Corp., an Edmonton-based company hired by the federal government to monitor Canada’s grain transportation system. “I think the risk is just making sure you’ve got the right grain at the right place at the right time.”
Shortages of rail cars to move last year’s record wheat and canola crops left a backlog of as much as C$20 billion of grain stuck on prairie farms.
While total Canada crop production is forecast to drop by about 20 percent to 76 million tons from 97 million tons a year earlier, output remains 3.5 percent above the five-year average, the government said in a Sept. 18 report.
Rail Backlog
Wayne Bacon couldn’t find enough rail cars to ship last year’s bumper crop from his 6,500-acre farm in Kinistino, Saskatchewan. This year, he can’t move his smaller wheat harvest. “We haven’t moved any grain this year except for canola,” Bacon, 68, said in a telephone interview. “It just seems like we never got over that backlog.”
Grain elevators located on less-traveled rail lines are not getting enough cars to move crops, Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said in an Oct. 1 telephone interview. Some farmers are still unable to sell grain leftover from last year’s harvest due to the transport shortage, he said.
“They’re just frustrated,” Hall said. “They might be going into default and losing their sales.”
Companies may need to gather grades of grain from multiple locations on the prairies to fulfill sales orders, unlike last year when crop quality was consistent, Quorum’s Hemmes said. There were 16 partially-loaded ships waiting for grain in Vancouver as of Sept. 18, above the average of 8 to 10 vessels.
Wet Weather
Wet weather delayed seeding across parts of the prairies and harvest progress was slowed due to continued rain and below-average temperatures. Moisture, disease and frost have damaged crops in parts of Saskatchewan, Canada’s largest producer of spring wheat and canola, the province’s agriculture ministry said in a Sept. 25 report.
Some of Canada’s wheat crops have suffered damage from moisture and frost that can cause holes in bread or make a loaf collapse, Daryl Beswitherick, program manager for quality assurance at the Canadian Grain Commission, said in a Sept. 29 telephone interview. Canada is known for its high-quality milling wheat and foreign buyers may try to source grain from the U.S. or Australia to meet their needs, he said.
‘More Precise’
“The transportation system this year will have to be more precise,” Wade Sobkowich, executive director of the Winnipeg-based Western Grain Elevator Association, said in a Sept. 18 telephone interview. “What’s going to be more important is getting the grain from the precise locations to where we need them because of the crop quality issues we’re facing.”
The government announced in August that Canadian National Railway and Canadian Pacific Railway Ltd. (CP) would each be required to move 536,250 tons of grain a week between Aug. 3 and Nov. 29 or face penalties. A similar order was imposed in March to clear a backlog of grain on the prairies.
Canada decided to fine CN because the railway “was not able to meet the minimum volume requirements,” Jana Regimbal, a spokeswoman for Transport Minister Lisa Raitt said in a Sept. 17 e-mail. The government declined to disclose how much below the target CN was as the “details are commercially sensitive and therefore cannot be shared,” Regimbal said.
Canadian Pacific has met the volume requirements, she said.
Transparent Data
The railways are not meeting shippers’ needs and companies are struggling to meet sales demand to eastern Canada and the U.S., Sobkowich said. There is no transparent data available to assess whether railways are meeting the grain thresholds outlined in a government order, he said. “The fact that CN hasn’t complied with the order in certain weeks shows that the consequences for not meeting the order are not sufficient,” Sobkowich said.
Canada’s federal government should lower the shipment minimum because farmers haven’t been delivering enough grain to allow railroads to comply with the order, Canadian National Railway Chief Executive Officer Claude Mongeau said Sept. 22 in Montreal. Canadian Pacific has moved more grain this year than it ever has before and the railway continues to be positioned to move significant volumes of grain, spokeswoman Breanne Feigel said in a Sept. 30 e-mail.
“I’m not sure where CN is getting the idea that there isn’t grain to handle,” Agriculture Minister Gerry Ritz said in a Sept. 23 teleconference with reporters. The government expects the railway to “pick up their game,” he said.
Wheat Prices
Shares of Canadian National rose 27 percent percent this year through yesterday and Canadian Pacific jumped 46 percent. The price of wheat, Canada’s biggest crop, is down 20 percent in 2014 to $4.8275 a bushel on the Chicago Board of Trade as the U.S. Department of Agriculture predicts global harvests will rise to a record 719.95 million metric tons. Canola in Winnipeg tumbled 11 percent this year to C$398.20 a ton.
Farmers who contracted to sell higher quality wheat will have to sell at a discount, said Doug Chorney, a farmer and president of Keystone Agricultural Producers. That will put a dent in their income since many farmers spent more money this year on seed, fertilizer and propane to dry wet grain.
“It’s going to be a sad story for a lot of farms this year,” Chorney said. “That’s a lot of money out of pocket if you don’t grow a crop or you grow a crop you can’t sell.”
source: Bloomberg