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Grain shippers warn that Class I railroads may lack network capacity to handle a large 2020-21 U.S. harvest alongside higher export volumes driven by China's Phase One purchase commitments. Railroads had stored locomotives during the spring downturn and have been returning equipment to service.
Shippers are concerned that precision scheduled railroading changes could limit capacity.
Tight rail capacity raises freight costs and can widen basis at interior elevators while supporting export-demand pricing, particularly for corn and soybeans moving to ports. Feed buyers in interior regions could see higher delivered costs.
freightwaves.comJoanna MarshSep 15, 2020After 285 past bullish logistics events, Corn moved a median +0.1% over 5 sessions (52% higher; middle half -1.5% to +1.5%), and +0.8% over 20.
After 206 past bullish logistics events, Soybeans moved a median +0.5% over 5 sessions (56% higher; middle half -1.3% to +2.6%), and +1.4% over 20.
After 283 past bullish logistics events, Wheat (SRW) moved a median -0.2% over 5 sessions (46% higher; middle half -1.4% to +1.3%), and -0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
