Canada Gas Narrows Discount as TransCanada Lowers Shipment Cost
Shipments have been declining for years as cheap supplies of shale gas in the eastern U.S. have priced out Canadian imports. Faced with declining volumes, TransCanada raised short-term tolls in July to try to get shippers to sign on to long-term contracts. Instead, a record amount of Canadian gas flowed into western storage. Prices this month reached their widest discount to the U.S. benchmark in five years. Regional gas storage reached 472.7 billion cubic feet last week, or 98 percent of the capacity surveyed by energy information firm Canadian Enerdata Ltd., above the previous record on Oct. 20 last year of 472.5 billion. The discount of AECO gas to Henry Hub reached $2.051 on Sept. 20, its widest level since Sept. 24, 2008. Market Sensitivity The strengthening price of AECO gas due to the toll changes last week underscores the sensitivity of this market right now, when youve got fundamentals stacked up against you, in terms of high storage supplies and weak demand, King said in an interview from Calgary. Price are expected to rise once colder weather brings winter heating demand. Weather is expected to be warmer than the normal seasonal average across much of North America over the next two weeks, with temperatures reaching into 80-degree Fahrenheit range in the eastern U.S., according to a forecast today by Commodity Weather Group LLC of Bethesda, Maryland .
Menahem Kahana/AFP/Getty Images A new free market for medical marijuana in Canada will replace small growers with large-scale indoor farms. Menahem Kahana/AFP/Getty Images Canada is ushering in what it projects to be a $1.3 billion medical marijuana free market this week, as it replaces small and homegrown pot production with quality-controlled marijuana produced by large farms. The market could eventually serve up to 450,000 Canadians, according to government estimates. As Toronto’s Globe and Mail explains, a transition phase began Monday that will allow more price fluctuation and phase out home and small-scale production. “In its place, large indoor marijuana farms certified by the [Royal Canadian Mounted Police] and health inspectors will produce, package and distribute a range of standardized weed, all of it sold for whatever price the market will bear,” the newspaper reports. “The first sales are expected in the next few weeks, delivered directly by secure courier.” Large-scale growers have begun applying for licenses to produce marijuana; one Ontario company hopes to grow cannabis in an old Hershey chocolate plant, Reuters reported last week. At least two large growers have already received their licenses. The free market will likely establish a price of around $7.60 per gram of dried marijuana bud, according to “Marihuana for Medical Purposes Regulations” posted by Canada’s health department. (And if you’re wondering about that spelling, it follows a precedent set in Canada’s controlled substances law.) The health agency projects that the legal marijuana supply industry “could grow to more than $1.3 billion per year in annual sales” within 10 years. Officials say the illegal cannabis market “represents a multibillion dollar per year industry.” The Canadian government says the new plan will also reduce its own costs, on a website explaining some of the changes. “The current program costs Canadian taxpayers millions of dollars each year because the $5/gram charged to program participants who choose to purchase from Health Canada is heavily subsidized,” Health Canada says.
CANADA STOCKS-TSX steady; Brookfield Office gain offsets U.S. budget fears
Health Canada is phasing out an older system on Monday that mostly relied on small-scale, homegrown medical marijuana of varying quality, often diverted illegally to the black market. In its place, large indoor marijuana farms certified by health inspectors will produce, package and distribute a range of standardized weed, all of it sold for whatever price the market will bear. RCMP will also conduct criminal checks on prospective operators. The first sales are expected in the next few weeks, delivered directly by secure courier. “We’re fairly confident that we’ll have a healthy commercial industry in time,” Sophie Galarneau, a senior official with the department, said in an interview. “It’s a whole other ball game.” The sanctioned birth of large-scale, free-market marijuana production comes as the Conservatives pillory Liberal Leader Justin Trudeau’s campaign to legalize recreational marijuana. Health Canada is placing no limits on the number of these new capital-intensive facilities, which will have mandatory vaults and security systems. Private-dwelling production will be banned. Imports from places such as the Netherlands will be allowed. Already 156 firms have applied for lucrative producer and distributor status since June, with the first two receiving licences just last week. The old system fostered only a cottage industry, with 4,200 growers licensed to produce for a maximum of two patients each. The Mounties have complained repeatedly these grow-ops were often a front for criminal organizations. The next six months are a transition period, as Health Canada phases out the old system by March 31, while encouraging medical marijuana users to register under the replacement regime and to start buying from the new factory-farms. There are currently 37,400 medical marijuana users recognized by the department, but officials project that number will swell more than 10-fold, to as many as 450,000 people, by 2024. The profit potential is enormous.
FedEx Freight Continues Accelerating LTL Shipping To and From Canada
“It’s politics impinging on capital markets, in a negative way,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management. U.S. politicians are playing to their home crowds, he added. The Toronto Stock Exchange’s S&P/TSX composite index was up 3.44 points, or 0.03 percent, at 12,847.52. In comparison, U.S. stocks were down sharply, and the TSX looked set to outperform the S&P 500 in the third quarter. The Canadian index will do better than its U.S. counterpart in the fourth quarter as well, said Cockfield, who expects the TSX to end the year at 13,500. Seven of the 10 main sectors on the index were in the red on Monday. Tracking a drop in the price of oil, shares of energy producers shed 0.8 percent. In the group, Suncor Energy Inc was down 1.2 percent at C$36.87, and Canadian Natural Resources Ltd gave back 0.6 percent to C$32.24.
Health Canada presides over birth of billion-dollar free market in marijuana
and major Canadian markets with a single network. The study included both expedited and non-expedited LTL services with published transit times and direct service between the U.S. and Toronto, Montreal, Vancouver, Ottawa and Calgary, the five largest metropolitan areas in Canada by population. “FedEx Freight is committed to adding value for our customers,” said William J. Logue, president and CEO of FedEx Freight. “By offering a published transit time advantage in the U.S. and to and from Canada, we are helping customers better meet their fast-cycle supply chain needs.” A subsidiary of FedEx Corp. /quotes/zigman/254280/quotes/nls/fdx FDX +0.30% , FedEx Freight has expanded its service offerings to support customers shipping to and from Canada. The company now provides A.M. Delivery service to Canada for both FedEx Freight Priority and FedEx Freight(R) Economy shipments, offering greater speed and reliability for delivery throughout North America and helping customers to better plan and manage inventory levels. FedEx Freight recently invested in new facilities in Rochester, N.Y.; Vancouver, British Columbia; Calgary, Alberta; and Toledo, Ohio. With the opening of the new Rochester facility, FedEx Freight Priority next-business-day service has expanded between 13 U.S. markets and select points in Canada. Additionally, the Toledo service center will play a vital role in our Canadian network with service to Ontario, Ottawa and Quebec. The opening of the 46,000-sq.-foot Vancouver facility provides coast-to-coast LTL and ocean shipping by serving as a FedEx International Direct Priority Ocean connector, and the Calgary service center routes shipments throughout Western Canada and the local area.