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Rail costs have dropped?
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SDELEV
Posted 10/29/2014 15:55 (#4150780 - in reply to #4150706)
Subject: RE: Rail costs have dropped?


East Central SD

Car costs have dropped over the last couple of weeks.  We really haven't seen any significant improvement in rail performance, but in the last couple of weeks the market is reacting to the transition from bean harvest to corn harvest.  And, the fact that the farmer has done a good job of keeping corn away from the market and on the farm whether that be bins going up/being completed in harvest, bagging machines, & farm ground piles.  This is a harvest without much pressure which I believe can be said Industry wide from the elevator side of business.  Harvest slot cars have dropped $2000 to $3000 off the highs, but are still trading historically high respective to "pre-oil" and other factors that drove cars to all time new highs.  Respective to the other part of the equation export basis has weakened as car cost have weakened.  Car cost on deferred months have dropped $500 to $1500.  Currently respective to the pecking order of rail, coal is number 1, oil, number 2, and grain is number 3 respective to units running with grain not that much behind oil. 

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