Wires

CN Rail dips as workers' strike enters second day, slows factory output

Nov 20 (Reuters) - Shares of Canadian National Railway Co fell as much as 2.2% on Wednesday, as a strike by about 3,000 unionized workers, including conductors and yardmen, at the country's biggest railroad entered the second day.

Talks with the management to end the stalemate was on even as factories whose supplies have been cut off from their markets began slowing production.

The union's concerns center on fatigue, safety and ensuring that workers' breaks are not reduced. However, in a letter to employees that was seen by Reuters, the railroad denied union arguments that the "strike was about safety."

Canada, one of the world's biggest exporters of farm products, relies on Canadian National and Canadian Pacific Railway to move crops, potash, coal and manufactured goods to ports and the United States.

Chemicals maker Chemtrade Logistics Income Fund warned a prolonged interruption of rail service could negatively impact its operating results and may prevent the company from meeting its earnings forecast.

Some plants that crush canola into vegetable oil and animal meal have slowed production and reduced purchases of the crop from farmers, said Chris Vervaet, executive director of the Canadian Oilseed Processors Association.

Canadian canola processors include Bunge Ltd, Cargill Ltd and Richardson International.

"Rail strikes are normally short-lived, with either a fast negotiated resolution or back-to-work legislation enacted to prevent a significant impact on the economy," TD Securities analyst Sean Steuart said in a note on Tuesday.

The strike could impact lumber shipments as well, Brokerage Raymond James said.

Shares of the railroad have risen 21% so far this year and were trading at C$119.93 on Wednesday. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur)