CHICAGO Dec 2 U.S. wheat traders shrugged off
news of a railroad strike in Canada, a major wheat producer and
exporter, as any supply disruption was expected to be short
lived and unlikely to shift demand to the United States.
The strike involving 1,700 locomotive engineers with
Canadian National Railway (CNR.TO) (CNI.N), which began on
Saturday, has choked Canada's grain transportation system
during the busy post-harvest season.
But a resolution could come as soon as Thursday.
U.S. traders said they have not yet seen any shift in
demand from global buyers away from Canadian wheat to U.S.
"One of our PNW (Pacific Northwest) exporter clients said
yesterday that it had felt no material difference since the
strike started. He didn't expect Canadian Western Red (hard red
spring wheat) to be any less competitive into the Asian
market," said Brian Liedl, analyst for Minnesota-based
brokerage Country Hedging.
"Japan is currently buying for the mid-February (shipment)
slot, and I imagine that any issues will be worked out by
then," he said of the major wheat importer and top buyer of
Canada's Parliament was set to start debate on Wednesday on
a bill to end the strike which it says could endanger economic
recovery. The earliest passage of the back-to-work bill could
be Thursday. [ID:nN02544166]
"Given the Canadian government's willingness to eliminate
any significant walkout, the impact of this news on wheat is
probably minimal," said Jerry Gidel, analyst for North America
Risk Management Inc.
Traders said the unlikely scenario of a prolonged strike
could ultimately divert some global demand for high-quality
wheat from Canada to the United States.
"Long term, you can make some of those switches if you want
to move some of those cargoes or buy replacement cargoes, but
it's always easier said than done. It would take a pretty
prolonged strike up there to impact our market or export
sales," said a U.S. wheat exporter.
(Additional reporting by Sam Nelson; Editing by Christian
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