Wires

UPDATE 3-CN, union reach deal to end Canada's biggest rail strike in a decade

Allison Lampert and Rod Nickel

(Adds context, comments from union and CN, updated stock price, reaction from farmer)

MONTREAL, WINNIPEG Nov 26 (Reuters) - Teamsters Canada and Canadian National Railway Co on Tuesday said they reached a tentative deal to end a strike at the country's largest railroad that had entered its eighth day, disrupting supply chains across the country.

CN said its employees will return to work at 2:00 p.m. ET on Tuesday with the union adding that normal operations will resume fully on Wednesday morning across the country. The tentative agreement has to be ratified by union members and CN said a vote is expected within eight weeks.

News of a deal ending Canada's largest rail strike in a decade sent CN shares up more than 2% in morning trading. Industry figures show about half of Canada's exports move by rail, and economists estimated a prolonged strike could eat into economic growth.

"We want to thank our customers for their patience and support and assure them that CN is preparing to resume full rail operations as soon as possible," J.J. Ruest, chief executive of Montreal-based CN, said in a statement.

Shares have rallied 4% since hitting a near three-week low on Thursday at C$118.50

Some 3,200 striking conductors and yard workers went on strike demanding improved working conditions, including worker rest breaks.

The tentative deal eases pressure Prime Minister Justin Trudeau's new government. On Monday, farmers facing propane shortages dumped wet corn in front of Trudeau's local Quebec office and pleaded for the government to intervene to stop the strike.

"Now we can hope that things can get back to normal in quick fashion. Its cost a lot of money to farmers already, said Markus Haerle, chairman of the Grain Farmers of Ontario.

Wet conditions have stalled the harvest across much of Canada, including much of Haerle's corn crop near St. Isidore, Ontario. Those crops must be dried before they can be sold, but the rail strike held up deliveries of propane, forcing farmers to use costlier alternatives.

Teamsters Canada President Francois Laporte praised Trudeau's Liberal government for allowing the workers to reach a negotiated settlement with CN.

"Previous governments routinely violated workers right to strike when it came to the rail industry. This government remained calm and focused on helping parties reach an agreement, and it worked, Laporte said in a statement.

The union said details of the agreement would not be released until members have the chance to review them first. (Reporting by Allison Lampert, additional reporting by Kelsey Johnson, writing by Steve Scherer, editing by Louise Heavens, Steve Orlofsky and David Gregorio)