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Market Matters Blog           01/27 12:01
Corn Basis Still Showing Off 
DTN Weekly Average DDG Price Slightly Higher
Wheat Is the Word
DTN Weekly Average DDG Price Steady
2020 Spending Bill Gives Money to Aging US Waterways; Is It Enough?
DTN Weekly Average DDG Price Weaker
2019 Corn Harvest: Will it Ever End?
DTN Weekly Average DDG Price Steady
FDA Inspections on the Rise to Ensure Facilities are FSMA Compliant
DTN Weekly Average DDG Price Stronger 

******************************************************************************
Corn Basis Still Showing Off 

   The DTN national average corn basis started to climb above the five-year 
average beginning in March. By the end of May, the basis was beginning to climb 
towards the five-year maximum average basis, surpassing that mark on July 3, 
and has not looked back since. I wrote about the strong corn basis on July 8, 
2019, talking about what was causing all the commotion. Here is a link to that 
story: 
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
9/07/08/corn-basis-heats-sign-cooling 

   Fast forward to today: while basis has backed off a little in the Eastern 
Corn Belt as farmers have started selling cash corn, according to various 
merchandisers -- that is not the case in the Western Corn Belt, where harvest 
conditions and quality have been a problem.

   I recently did a 2019 corn harvest story that painted a picture of how rough 
2019 was (and in some areas is) for new crop corn; another cause of the 
strength in the basis. 
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/202
0/01/06/2019-corn-harvest-will-ever-end 

   So, what else is causing the strength in the corn basis? It's not for a lack 
of corn, especially given the poor export demand we have seen this crop year. 
In the Jan. 10 USDA report, corn production was forecast at 13.69 billion 
bushels (bb) with a national average yield of 168 bushels per acre (bpa), 1 bpa 
higher than the prior month's forecast. Corn quarterly stocks were down 5% from 
the same time last year. As for export demand, in the most recent WESS report, 
the USDA said that corn export commitments for the week ending Jan. 16 were 37% 
below the same time one year ago.

   The Jan. 10 report surprised many, given that in December 2019 there was 
still unharvested corn throughout the Midwest, counted as "on-farm" storage by 
USDA. However, in the Jan. 10 report, USDA posted a special note that it would 
resurvey farmers regarding unharvested corn acreage in Michigan, Minnesota, 
North Dakota, South Dakota and Wisconsin. 

   On Jan. 3, in the USDA NASS December 2019 "Crop Progress -- State Stories," 
many of the Midwest states reported on their unharvested corn acreage. North 
Dakota reported that corn harvest was 48% completed, while Minnesota reported 
that there was still corn standing that "would likely not be harvested until 
spring." Minnesota NASS added, "Producers leaving corn harvest until spring 
cite high moisture and poor test weights as being a big concern, while for 
other producers it's an issue with field conditions."

   Michigan NASS noted that, "Grain condition degraded quickly after Dec. 1. 
Corn harvest continued in certain locales into 2020." South Dakota reported 
that harvest was 90% complete, while Wisconsin noted the warm weather in 
December resulted in muddy fields, slowing down harvest. "Corn and soybean 
harvest, as well as manure spreading, continued through December. A fair amount 
of corn is still standing."

   One question that comes to mind for some is what the quality of the 
unharvested corn is, especially in the Upper Midwest where test weight was a 
problem in the new crop; another case for the strong basis for #2YC, the 
industry standard that prices are based off. 

   Many elevator merchandisers have told me that while the lower test weight 
corn is finding a home at many U.S. ethanol plants, exporters are struggling to 
make a #2YC grade for export to countries who demand that grade, which is a 
minimum 54 pounds. Export basis has remained strong to the Pacific Northwest 
for #2YC and discounts for #3YC, a minimum of 52 pounds, have narrowed recently 
to just a 5-cent spread. 

   Also causing some problems for many buyers, not just the PNW, is the Broken 
Corn and Foreign Material (BCFM, a big problem for many this year because so 
much of the new crop corn needed to be dried and that increases the broken 
kernels as the corn is handled more than the norm. The maximum allowed for #2YC 
is 3% BCFM and #3YC is 4% BCFM.

   Basically, we have plenty of corn inventory in the U.S., but not enough good 
quality corn to satisfy all the buyers.

   I spoke to Matt Wiegand, a broker for FuturesOne Risk Management Company in 
Lincoln, Nebraska, and he told me that in the past week there was a little more 
basis push because of farmers who have "bin sides with mud or have to truck on 
gravel" and were unable to do much in the way of loading and moving grain. 

   I asked him to give me an idea of basis in his draw area. "I'd say that 
through south-central Nebraska, basis is 3 to 5 cents better than normal and I 
think the more interesting thing is that some of the more out of the way 
locations are bidding up a bit more. For example, Red Cloud, Nebraska, shuttle 
loader was bidding the same as Fairmont within the Cooperative Producers, Inc. 
(CPI) chain. And usually that is a 3-5 cent spread." 

   Wiegand noted that eastern Nebraska elevators and terminals seem to be about 
a nickel better than usual for this period, and northeast Kansas was seen 
bidding up earlier than usual with Bartlett versus Cargill in the 
Atchison/Topeka areas. "White corn bidding has been more aggressive than usual 
with Dorchester Co-op pulling loads forward and having a 10-cent premium to 
CPI/Andersons and usually that is flat to the other way. Southwest Nebraska has 
seen some good feedlot bids for picked up relative to local rail facilities, 
with the farmer picking up about 15 cents at the bin versus delivered."

   Angie Setzer, vice president of Grain Citizens LLC said, "We're seeing two 
very different market structures here in Michigan as of late, with feeders 
paying substantially more than ethanol producers in an attempt to get bushels 
moving to them from non-traditional areas, and it seems to be working." I 
mentioned to her that I had heard that some farmers are not selling right now 
because of the expectations for a third Market Facilitation Program (MFP) 
payment. "I'm not necessarily seeing farmers hold tight because of MFP 
payments, but obviously if cash isn't motivating them and they think they 
should be getting more for their product, they won't be active sellers," said 
Setzer. "For me here, we have a decent amount of bushels moving for the typical 
cash flow reasons as well as quality concerns. The weather hasn't been too 
terrible around here either, allowing folks to get out and get some loads 
shipped."

   I checked in with her after seeing some recent weakness in basis in the East 
and Southeast and she told me that feeders are still paying substantially more, 
but this past week it's just kind of "weaker across-the-board" scenario.

   As we continue to see a historical corn basis this crop year, it will be 
interesting to watch how long this will last as we head closer to spring. 

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly Average DDG Price Slightly Higher

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was up $1 on average at $150 per ton for 
the week ended Jan. 23. Prices were slightly higher on average as cash corn 
prices moved higher this week.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Jan. 23 was at 106.68%. The value of DDG relative to 
soybean meal was at 50.18%. The cost per unit of protein for DDG was $5.56, 
compared to the cost per unit of protein for soybean meal at $6.29. 

   The Energy Information Administration reported Thursday morning that, for 
the week ended Jan. 17, domestic ethanol inventory continued to build in spite 
of producers cutting production more than 4% from a near-two-year high, while 
blending demand continued to rise.

   In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS 
markets are still quiet this week, but prices are firming across the board. 
Barge CIF NOLA values are $1-$2 per metric ton (mt) higher this week for spot 
positions while April delivery quotes are up $3/mt. U.S. rail rates are 
continuing to firm as well, up $2/mt this week. FOB NOLA offers are mostly 
steady with a relatively flat forward curve, while prices for 40-foot 
containers for Southeast Asia are up $1-$2/mt this week. The average quote for 
February containers to Southeast Asia is $249/mt." 

   Once again, high water is causing slowdowns for barges heading southbound to 
the Gulf. American Commercial Barge Line noted that, "Due to heightened river 
levels, southbound tows on the Lower Miss have been reduced by five to 10 
loads. Expect these tow restrictions to remain in effect well into February 
basis current forecasts." In addition, ACBL notes that, because of high river 
levels, transit at Memphis, Vicksburg and Baton Rouge is restricted to daylight 
only.

   * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)

   * FOB (free on board means buyer pays costs of ocean freight, 

   insurance, unloading, and transportation from originating port)


ALL PRICES SUBJECT TO CONFIRMATION           CURRENT       PREVIOUS     CHANGE
COMPANY     STATE                           1/23/2020      1/16/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri                Dry        $166          $165         $1
                                    Wet        $83            $83         $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
            Missouri                Dry        $160          $165        -$5
                                    Wet        $82            $80         $2
CHS, Minneapolis, MN (800-769-1066)
            Illinois                Dry        $155          $155         $0
            Indiana                 Dry        $150          $150         $0
            Iowa                    Dry        $140          $140         $0
            Michigan                Dry        $145          $145         $0
            Minnesota               Dry        $140          $140         $0
            North Dakota            Dry        $145          $145         $0
            New York                Dry        $155          $155         $0
            South Dakota            Dry        $140          $140         $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas                  Dry        $155          $155         $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana                 Dry        $155          $155         $0
            Iowa                    Dry        $138          $137         $1
            Michigan                Dry        $150          $145         $5
            Minnesota               Dry        $138          $135         $3
            Missouri                Dry        $158          $155         $3
            Ohio                    Dry        $160          $155         $5
            South Dakota            Dry        $158          $158         $0
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas                  Dry        $165          $165         $0
                                    Wet        $65            $65         $0
            Illinois FEB            Dry        $164          $164         $0
            Nebraska                Dry        $160          $160         $0
                                    Wet        $65            $65         $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois                Dry        $155          $155         $0
            Indiana                 Dry        $155          $155         $0
            Iowa                    Dry        $140          $140         $0
            Michigan                Dry        $150          $150         $0
            Minnesota               Dry        $140          $140         $0
            Nebraska                Dry        $145          $145         $0
            New York                Dry        $160          $170        -$10
            North Dakota            Dry        $150          $150         $0
            Ohio                    Dry        $160          $160         $0
            South Dakota            Dry        $140          $140         $0
            Wisconsin               Dry        $143          $140         $3
Valero Energy Corp, San Antonio Texas
            Indiana                 Dry        $150          $150         $0
            Iowa                    Dry        $140          $140         $0
            Minnesota               Dry        $140          $140         $0
            Nebraska                Dry        $145          $145         $0
            Ohio                    Dry        $160          $160         $0
            South Dakota            Dry        $140          $140         $0
            California              Dry        $204          $204         $0
Western Milling, Goshen, California (559-302-1074)
            California              Dry        $215          $215         $0
*Prices listed per ton.
            Weekly Average                     $150          $149         $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      1/23/2020   $3.9375      $140.63
                             Soybean Meal      1/23/2020   $298.90
            DDG Weekly Average Spot Price        $150.00
                                  DDG Value Relative to:   1/23        1/16
                                                    Corn   106.68%      111.10%
                                            Soybean Meal    50.18%       49.57%
                               Cost Per Unit of Protein:
                                                     DDG     $5.56        $5.52
                                            Soybean Meal     $6.29        $6.33
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow her on Twitter @MaryCKenn

******************************************************************************
Wheat Is the Word

   Few financial assets have gotten off to as good of a start this year as 
Chicago wheat has, adding over 5.0% in 2020 to pair with its 11.0% gain in 
2019. While the performance itself has been impressive, it is also worth noting 
Chicago wheat is now challenging the highest levels since 2015 after scraping 
decade lows just a couple years prior. So, it begs the question of where the 
strength is coming from, and with wheat, the answer is always more nuanced than 
it appears on the surface.

   When discussing wheat, it is always best to start with a look at the 
by-class balance sheet. The soft red winter (SRW) wheat balance sheet saw 
planted acres in 2019-20 fall to the lowest since 2010-11, while harvested 
acres fell to 3.733 million, which were the lowest on record going back to 
1986-87. Total supplies for the 2019-20 marketing year fell to 402 million 
bushels (mb) from 495 mb the year before, and were also the lowest since 
1986-87. The low wheat prices from 2015 to 2019 have slowly been doing their 
job as carryout dropped from a seven-year high in 2016-17 of 215 mb to a 
projected 106 mb in 2019-20. Winter wheat acres planted in the fall of 2019 
totaled 5.64 million acres versus 5.201 million the year before, according to 
USDA, so there is a possibility we've seen the low-water mark for SRW acreage

   While supplies on the balance sheet are important, supplies held in CME 
Group deliverable warehouses are even more important. The wheat held in these 
warehouses is known as "the supply of last resort" as CBOT futures are backed 
by physical product as opposed to cash-settled indices on other exchanges. As 
of Jan. 17, there were 22.845 mb of soft red wheat in deliverable warehouses. 
This was down 1.887 mb on the week, and down a little over 30 mb from the year 
before to the lowest deliverable stocks since 2007-08. The 30 mb drop is down 
56% from the previous year, which is drastically more than the 18.7% decline 
the USDA sees in total wheat stocks. If an end user cannot buy wheat in the 
cash market, they should always be able to stand in for delivery by being long 
Chicago wheat futures. If the supply of deliverable stocks and the amount of 
wheat registered for delivery declines to levels like we are seeing now, it is 
a good indicator the holder of that wheat and those delivery receipts is not 
going to part ways with them easily. The struggle between end users wanting to 
own wheat and commercials not wanting to part with their stocks helps us think 
about how futures can rise and calendar spreads can tighten.

   Supply has been the largest driver of the price rally, but demand has also 
played a crucial role. The wheat behind the Chicago contract is SRW wheat, 
which is ideal for low-protein products like crackers and pastries. While no 
commodity demand is completely inelastic, there are times when a certain class 
of wheat can bring a value much higher than what one would perceive. Cash basis 
along the Ohio and Mississippi river systems is trading at 40 to 50 cents above 
gross delivery equivalence, meaning end users are having a very difficult time 
sourcing the bushels and the quality they need. Bids at the Gulf of Mexico for 
No. 2 SRW wheat are currently around 120 to 130 cents above the March futures 
board. These values would be 30 to 40 cents above a year ago and 60 to 70 cents 
above the three-year average. Countries like Egypt wouldn't take a second look 
at U.S. SRW wheat at these prices, but places like Mexico, Columbia and Nigeria 
remain consistent buyers because of the end use qualities they need.

   One cannot talk about wheat and basis without discussing calendar spreads. 
The March/May calendar spread is trading a 1.25-cent inverse at the time of 
this writing. This compares with a 5.75-cent carry a year ago, a 12.75-cent 
carry two years ago and a 13.75-cent carry in 2017. For many years, Chicago 
wheat was the darling of managed funds because of the huge carries offered from 
the Variable Storage Rate (VSR) program. The hefty supplies of SRW wheat and 
the relatively tepid demand created great incentive for commercials to store 
wheat and funds to remain short futures. When funds are long and roll in a 
carry market, their "purchase price" is increased by the amount of carry. When 
funds are short in a carry market, however, their "sale price" is improved by 
the amount of carry. If futures volatility stayed low, as it did in wheat from 
2015-19, funds could simply collect the positive roll yield from being short 
and deploy risk capital in other markets. As supply dynamics began to change in 
2019, so too did calendar spreads.

   Funds losing their carry market can be illustrated rather clearly when 
examining their positions from the CFTC. Funds ballooned their net-short 
position in Chicago wheat to 117,833 contracts on April 30, which was the 
largest net short since January 2018. Funds began to cover that position into 
summer, hitting a net short of 13,693 contracts on July 2 after harvest. They 
built the position back to a net short of 56,685 contracts on Sept. 3 before 
covering and going net long 6,424 contracts as of last week's data. To give a 
sense of just how rare it is that funds are net long in Chicago wheat, the 
average fund position for all weeks going back to Jan. 1, 2007, is a net short 
of 53,778 contracts. The amount of carry or inverse in Chicago wheat is likely 
to be a large indicator of fund positioning in 2020.

   Chicago wheat has enjoyed an impressive run to finish 2019 and begin 2020. 
Much of the rally has been driven by the drop in SRW wheat production inside 
the United States due to weather and years of low prices. Producers responded 
to the oversupply situation by cutting planted acres to decade lows while 
Mother Nature cut harvested acres to record lows. Because of the unique 
characteristics of SRW wheat, the highest prices in nearly five years have not 
completely shut off demand. Finally, the structural changes to the Chicago 
wheat market removed the comfortable carries so many have been accustomed to, 
including managed funds. The speculative community responded in kind by moving 
to a very rare net-long position. The question now becomes whether they will be 
comfortable in extending that long position throughout 2020.

   Tregg Cronin can be reached at tmcronin31@gmail.com

   Follow Tregg Cronin on Twitter @5thWave_tcronin

******************************************************************************
DTN Weekly Average DDG Price Steady

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was unchanged at $149 per ton for the week 
ended Jan. 16. Prices were steady on average this week, with an uptick seen in 
California prices. The weekly Energy Information Administration report showed 
that, for the week ended Jan. 10, ethanol plant production jumped over 3% after 
two straight weekly declines.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Jan. 16 was at 111.10%. The value of DDG relative to 
soybean meal was at 49.57%. The cost per unit of protein for DDG was $5.52, 
compared to the cost per unit of protein for soybean meal at $6.33. 

   In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS 
markets are still quiet this week with much of the trade watching for the 
details of the U.S.-China trade agreement. Barge CIF NOLA values are $1 to $2 
metric ton (mt) higher this week with winter storms across the Midwest 
tightening logistics. U.S. rail rates are increasing for the same reason as 
well. FOB NOLA offers are steady/slightly higher amid moderate international 
demand. Prices for 40-foot containers to Southeast Asia are $1/mt higher on 
average this week, with notable price increases for product destined for 
Vietnam and Thailand." 

   * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)

   * FOB (free on board means buyer pays costs of ocean freight, 

   insurance, unloading, and transportation from originating port)


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT    PREVIOUS  CHANGE
COMPANY         STATE                   1/16/2020   1/9/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
                Missouri          Dry     $165        $165      $0
                                  Wet      $83        $83       $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
                Missouri          Dry     $165        $165      $0
                                  Wet      $80        $80       $0
CHS, Minneapolis, MN (800-769-1066)
                Illinois          Dry     $155        $155      $0
                Indiana           Dry     $150        $150      $0
                Iowa              Dry     $140        $140      $0
                Michigan          Dry     $145        $145      $0
                Minnesota         Dry     $140        $140      $0
                North Dakota      Dry     $145        $145      $0
                New York          Dry     $155        $155      $0
                South Dakota      Dry     $140        $140      $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
                Kansas            Dry     $155        $160     -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
                Indiana           Dry     $155        $155      $0
                Iowa              Dry     $137        $137      $0
                Michigan          Dry     $145        $145      $0
                Minnesota         Dry     $135        $135      $0
                Missouri          Dry     $155        $155      $0
                Ohio              Dry     $155        $155      $0
                South Dakota      Dry     $158        $158      $0
United BioEnergy, Wichita, KS (316-616-3521)
                Kansas            Dry     $165        $165      $0
                                  Wet      $65        $65       $0
                Illinois FEB      Dry     $164        $160      $4
                Nebraska          Dry     $160        $160      $0
                                  Wet      $65        $65       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois        Dry               $155    $155         $0
Indiana         Dry               $155    $155         $0
Iowa            Dry               $140    $140         $0
Michigan        Dry               $150    $150         $0
Minnesota       Dry               $140    $140         $0
Nebraska        Dry               $145    $145         $0
New York        Dry               $170    $170         $0
North Dakota    Dry               $150    $150         $0
Ohio            Dry               $160    $160         $0
South Dakota    Dry               $140    $140         $0
Wisconsin       Dry               $140    $140         $0
Valero Energy Corp, San Antonio Texas
                Indiana           Dry     $150        $150      $0
                Iowa              Dry     $140        $140      $0
                Minnesota         Dry     $140        $140      $0
                Nebraska          Dry     $145        $145      $0
                Ohio              Dry     $160        $160      $0
                South Dakota      Dry     $140        $140      $0
                California        Dry     $204        $202      $2
Western Milling, Goshen, California (559-302-1074)
                California        Dry     $215        $210      $5
*Prices listed per ton.
                Weekly Average            $149        $149      $0
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

                      VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date        Bushel  Short Ton
                                     Corn      1/16/2020     $3.7550     $134.11
                             Soybean Meal      1/16/2020     $300.60
            DDG Weekly Average Spot Price        $149.00
                                  DDG Value Relative to:    1/16         1/9
                                                    Corn     111.10%     108.86%
                                            Soybean Meal      49.57%      50.30%
                               Cost Per Unit of Protein:
                                                     DDG       $5.52       $5.52
                                            Soybean Meal       $6.33       $6.24
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
2020 Spending Bill Gives Money to Aging US Waterways; Is It Enough?

   Late on Dec. 20, 2019, President Donald Trump signed into law the 2020 
spending bills. Contained in the spending package for fiscal 2020 was $7.65 
billion for the civil works mission of the U.S. Army Corps of Engineers 
(USACE), which oversees the inland waterways system and port dredging. That 
amount is $652 million above the current spending level and $2.69 billion more 
than the president had requested earlier this year, according to the Waterways 
Council (WCI), an industry-funded group that advocates for waterways spending.

   The bill also includes another provision sought by the waterways industry, 
which is full use of the estimated receipts of the Inland Waterways Trust Fund 
(IWTF) that includes additional prior-year revenues to produce a strong 
investment level of $317 million for spending on needs of the antiquated inland 
waterways system during the next fiscal year, according to WCI. 

   The IWTF was established to help underwrite the costs of construction and 
major rehabilitation of the nation's inland waterway system. "Funds are 
generated via the Inland Waterways Tax: a 29 cent per gallon assessment on 
diesel fuel used on 27 stretches of the country's inland waterway system. The 
12,000 miles of fuel taxed waters include most of the nation's largest rivers: 
the Mississippi, Ohio, Illinois, the lower Missouri, and the Gulf and Atlantic 
Intracoastal waterways," notes the Soy Transportation Coalition (STC) on their 
website.

   According to the STC, the fund annually generates approximately $110 million 
to $120 million per year via the IWTF. These funds are then matched with 
revenue from the U.S. Treasury. The total $220 million to $240 million is 
directed toward construction and major rehabilitation projects. The U.S. 
Treasury assumes 100% of the costs of operations and maintenance.

   The American Association of Port Authorities (AAPA) praised the funding 
bills, saying the $225 million allocated for port infrastructure will be spent 
on improvements to gate operations, roads and rail within and connecting ports, 
ship berths and cargo operations.

   "Ultimately much more is needed, but this package reflects the association's 
ongoing priorities for improving the critical infrastructure that is 
represented at America's seaports and will go a long way to enhancing trade and 
transportation across the nation," said AAPA President Chris Connor in a 
statement.

   AAPA also noted the Corps of Engineers received a 12% increase in spending 
for deep-draft dredging projects and got money for a regional demonstration 
program to respond more effectively to critical national dredging requirements 
along the Gulf coast between Louisiana and Alabama. 

   Here is a link to a story I did on the importance of non-flood related 
dredging in the Lower Mississippi River. A study by the STC shows doing so 
would have a positive impact on farmers who haul soybeans and other grains to 
river terminals that eventually send them down the Mississippi to the Gulf of 
Mexico for export: 
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
9/08/05/dredge-will-come .

   

   A DROP IN THE INFRASTRUCTURE BUCKET?

   The spending package includes $75.3 million to begin construction of a new 
Soo Lock. It will take seven to 10 years and $1 billion to build another lock, 
and this money will cover the first year of work. "This would be the first time 
in decades that construction of a new lock at the Soo has received funding 
appropriated by Congress. Construction of a new lock was first authorized in 
1986 and again in 2007, but leaders in Washington then were unable to get 
funding for the construction," said Congressman John Moolenaar, R-Mich., on his 
website. Congressman John Moolenaar is Michigan's senior member of the House 
Appropriations Committee and has been a strong advocate for construction of the 
Soo Locks.

   In August 2019, the U.S. Department of Agriculture (USDA) released a 
significant new study that quantifies the cost-savings and competitive 
advantages that would accrue from investing in long-delayed improvements to the 
inland waterways locks and dams on the Upper Mississippi and Illinois River 
system: 
https://www.ams.usda.gov/services/transportation-analysis/inland-waterways-repor
t .

   

   This study is a warning that failure to modernize those and other locks and 
dams, "increases costs of U.S. farm exports and helps Brazilian exporters close 
the cost gap with the United States." The study also pointed out what has been 
obvious for years; that U.S. barge traffic delays on the Mississippi and other 
rivers continue to rise as a result of growing lock and dam malfunctions. The 
added costs associated with those delays are ultimately passed on to shippers, 
especially farmers. That means farmers will get a lower price for their 
commodities shipped on the inland waterways system.

   The Mississippi River System is America's primary inland waterways system. 
It comprises the Mississippi, Arkansas, Illinois, Ohio and Tennessee Rivers, 
and Gulf Intracoastal Waterway. "This extensive waterway system feeds exports 
from grain elevators from Baton Rouge through New Orleans, to Myrtle Grove, 
Louisiana. This region handles 57% of U.S. corn exports in volume (valued at 
$4.8 billion) and 59% of U.S. soybean exports ($12.4 billion), as well as 55% 
of soybean meal exports and 72% of distiller's dried grains exports," said USDA 
in the study results.

   The study noted without "consistent, predictable funding, the grain and 
soybean export draw area around the waterways system could shrink from an 
average of 150 miles, currently, to as little as 75 miles under a constrained 
scenario, as the cost to ship on the river increases." For corn, delays on the 
Mississippi River could have up to a 24 cent per bushel impact, while impact to 
soybeans could be up to 25 cents per bushel.

   The river's infrastructure continues to deteriorate and major flood events 
like in 2019 put even more stress on locks and dams. Most of the locks and dams 
were built in the 1930s with a life expectancy of maybe 50 years. In March 
2019, the U.S. Army Corps of Engineers estimated the backlogged maintenance 
cost for locks and dams of the Mississippi and Illinois rivers is more than $1 
billion. 
https://www.mvr.usace.army.mil/About/Offices/Programs-and-Project-Management/Dis
trict-Projects/Projects/Article/1164618/backlog-of-maintenance-major-rehabilitat
ion-and-major-maintenance-mississippi-r/ .

   

   There have been many lock and dam failures recently due to barges striking 
them during flooding or heavy ice events, but also due to structural failures 
because of old age. The Corps has been relentless in making repairs on top of 
normal maintenance, but eventually that may not be enough to keep those locks 
and dam functional. 

   A major failure at any of the locks and dams would paralyze commerce along 
the river. The U.S. government needs to get serious about properly funding the 
waterways infrastructure to prevent that from happening.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly Average DDG Price Weaker

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was $1 per ton lower on average at $149 per 
ton for the week ended Jan. 9. Prices were mixed this week as the cash corn 
market remains flat. The weekly Energy Information Administration report showed 
plants reduced ethanol production, but DDG supplies versus current demand don't 
appear to be affected.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Jan. 9 was at 108.86%. The value of DDG relative to 
soybean meal was at 50.30%. The cost per unit of protein for DDG was $5.52, 
compared to the cost per unit of protein for soybean meal at $6.24. 

   In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS 
markets are still quiet this week as traders emerge from the holiday lull. 
Merchandisers report active inquiries from Asian buyers, but sales are slow so 
far. Barge CIF NOLA values are $1 to $2 metric ton (mt) lower this week but 
forecasts for winter weather across much of the Midwest this weekend/early next 
week could tighten the market due to logistics issues. FOB Gulf values are 
$3/mt lower for spot shipment while deferred positions are mostly steady. 
Asking prices for 40-foot containers to Southeast Asia are steady for January 
shipment at $246/mt while February/March values are slightly lower." 

   Barges moving south in the Lower Mississippi River from Cairo to the Gulf 
are currently subject to reduced tow sizes and safety protocols because of high 
water there. American Commercial Barge Line noted in their daily river update 
"a significant rain event is expected to impact the river system beginning 
tonight, 1/9, and lasting through Saturday, 1/11. The pattern is currently 
predicted to drop 4-7 inches of rain in St. Louis and the Illinois River. This 
amount of rain could impact the Lower Miss and Gulf areas in the coming weeks." 

   * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)

   * FOB (free on board means buyer pays costs of ocean freight, 

   insurance, unloading, and transportation from originating port)


ALL PRICES SUBJECT TO CONFIRMATION        CURRENT  PREVIOUS  CHANGE
COMPANY         STATE                    1/9/2020  1/2/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
                Missouri           Dry     $165      $165      $0
                                   Wet      $83       $83      $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
                Missouri           Dry     $165      $165      $0
                                   Wet      $80       $80      $0
CHS, Minneapolis, MN (800-769-1066)
                Illinois           Dry     $155      $155      $0
                Indiana            Dry     $150      $150      $0
                Iowa               Dry     $140      $140      $0
                Michigan           Dry     $145      $145      $0
                Minnesota          Dry     $140      $140      $0
                North Dakota       Dry     $145      $145      $0
                New York           Dry     $155      $155      $0
                South Dakota       Dry     $140      $140      $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
                Kansas             Dry     $160      $160      $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
                Indiana            Dry     $155      $155      $0
                Iowa               Dry     $137      $140      -$3
                Michigan           Dry     $145      $145      $0
                Minnesota          Dry     $135      $139      -$4
                Missouri           Dry     $155      $158      -$3
                Ohio               Dry     $155      $160      -$5
                South Dakota       Dry     $158      $158      $0
United BioEnergy, Wichita, KS (316-616-3521)
                Kansas             Dry     $165      $165      $0
                                   Wet      $65       $65      $0
                Illinois FEB       Dry     $160      $160      $0
                Nebraska           Dry     $160      $160      $0
                                   Wet      $65       $65      $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois        Dry                $155    $155       $0
Indiana         Dry                $155    $155       $0
Iowa            Dry                $140    $145       -$5
Michigan        Dry                $150    $150       $0
Minnesota       Dry                $140    $140       $0
Nebraska        Dry                $145    $165      -$20
New York        Dry                $170    $170       $0
North Dakota    Dry                $150    $150       $0
Ohio            Dry                $160    $160       $0
South Dakota    Dry                $140    $140       $0
Wisconsin       Dry                $140    $140       $0
Valero Energy Corp, San Antonio Texas
                Indiana            Dry     $150      $150      $0
                Iowa               Dry     $140      $135      $5
                Minnesota          Dry     $140      $135      $5
                Nebraska           Dry     $145      $145      $0
                Ohio               Dry     $160      $155      $5
                South Dakota       Dry     $140      $140      $0
                California         Dry     $202      $208      -$6
Western Milling, Goshen, California (559-302-1074)
                California         Dry     $210      $216      -$6
*Prices listed per ton.
                Weekly Average             $149      $150      -$1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

             VALUE OF DDG VS. CORN & SOYBEAN MEAL
               Settlement Price: Quote Date   Bushel Short Ton
                            Corn    1/9/2020 $3.8325   $136.88
                    Soybean Meal    1/9/2020 $296.20
   DDG Weekly Average Spot Price     $149.00
                      DDG Value Relative to:   1/9      1/2
                                        Corn 108.86%   107.28%
                                Soybean Meal  50.30%    49.90%
                   Cost Per Unit of Protein:
                                         DDG   $5.52     $5.56
                                Soybean Meal   $6.24     $6.33
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
2019 Corn Harvest: Will it Ever End?

   As the calendar turned to 2020, corn harvest in the U.S. was not 100% 
complete. In the last weekly Crop Progress report for 2019, USDA reported that 
as of Dec. 8, 92% of the U.S. corn crop had been harvested. That was hardly 
obvious in North Dakota where only 43% of the crop had been harvested as of 
that date, while South Dakota was at 83% and Michigan and Wisconsin were 74% 
completed. On Jan. 2, North and South Dakota updated their corn harvest as of 
Dec. 31 versus the Dec. 8 report with North Dakota reporting harvest 48% 
complete and South Dakota reporting 90% of its corn harvested.

   Besides the late harvest in many states, the weather was unkind to the 
quality of the crop, with many farmers reporting low test weights, more broken 
kernels and other discountable grade factors. Perhaps one of the biggest 
challenges during the 2019 corn harvest was that the corn was wet and needed 
drying. Farmers faced drying charges, and in the Upper Midwest, propane 
shortages left farmers and some elevators unable to dry corn, causing a 
slowdown in harvest, on top of the major snowstorms that started as early as 
Oct. 1.

   I spoke to farmers and elevators in a few different states and asked how 
their harvest went, extra costs they faced and what other challenges they faced 
in 2019. Here were their comments:

   Cory Tryan, grain department manager at Alton Grain Terminal LLC in 
Hillsboro, North Dakota, told me that the 90-plus-day corn varieties planted 
between May 10 and end of May mostly didn't make black layer before the first 
hard freeze and remain at 50 pounds per bushel (lbs./bu) or less. "The majority 
of this corn will likely be left in the field due to high moistures being stuck 
in mid- to upper-20s and poor quality. When dried mechanically, it generally 
loses some test weight, breaks up bad and likely will not store well. It is 
unclear if anything improves on immature corn if harvested next spring. Our 
experiences carrying corn to next spring successfully was mature black-layered 
corn that continued to field dry and add test weight." He noted that, at the 
end of December, there was about 60% of the corn left in the field until spring 
and much of it is immature.

   "We have somewhere in the area of 40% of our corn left to harvest," said 
Keith Brandt, general manager of Plains, Grain and Agronomy in Enderlin, North 
Dakota. "That corn was tested at 26% to 30% plus moisture in early to 
mid-November. Since then, some of that has field dried to 21% to 23% and 
possibly gained 2 lbs./bu of test weight. That puts that corn at over 50 
lbs./bu, with some as high as 51.5. The 50 lbs. corn has a 20-cent discount and 
then 5 cents each 1/2 pound below 50 lbs." 

   Brandt said their biggest challenge was trying to keep combining after the 
recent snowstorm, which increased the snow depth in the fields. "We might have 
a lot of cobs in snow now; we need that January thaw!" said Brandt. "In 
addition, the snow that came after Thanksgiving insulated the ground and it has 
now thawed out. So, we battle mud in the fields and roads in areas that aren't 
regularly plowed out, so you have to plow the road." 

   Matthew Krueger of K & D Krueger Farms & Sons in East Grand Forks, 
Minnesota, told me on Dec. 30, "Well, we are still doing corn harvest. We are 
about 48% complete, and when we hand-shelled out the next fields, it showed 
that it was close to 28% moisture! We also just got 16 inches of snow dumped on 
us, so 2019 isn't done yet. 

   "Our first acres looked good, but after we got it combined, it ran 35% under 
projection. This wasn't a planned hit. We also have had test weight be highly 
variable by variety. Our best field averaged 54 lbs./bu, but our worst has been 
51 lbs. We suspect these last acres that are still wet are in probably worse 
shape (maybe 48 lbs./bu). What a year; we just want it to be done." 

   Krueger said they can't combine in the snow until the temperatures get 
colder. "If we can get 10 degrees and colder, we can combine with snow on the 
corn and have no issues. At this point, we figure it's not going anywhere. The 
stalks seem to be in okay shape to support the plant a while longer. I don't 
know if we are keen on leaving the corn out there until March/April, but sadly, 
we may just have to." 

   Tin Dufault, Crookston, Minnesota, told me that as of Christmas, he 
estimated 66% of the corn in that area is harvested. "Growers will be waiting 
on the rest of the crop until late winter/early spring to finish; hoping the 
corn will dry down, but not breakdown."

   Josh Backstrom, Maddock, North Dakota, said that they experienced the third 
spring in a row that was extremely dry, with a lot of wheat and corn seed going 
into dry dirt, only to be saved at the last minute with a much-needed rain 
event in mid-late May. "We had beautiful rains in June, and then shutting off 
again in July and August, hurting the later season row crops. The difference 
this year was record rains in September followed by 30 inches of wet snow from 
the Oct. 10 blizzard. Thankfully, the weather cooperated enough to melt most of 
the snow and then freeze hard enough to get the combines across the fields to 
get everything in except the areas that still had snow drifts and all the 
sloughs that were plumb full of water. After that hard battle, we thought the 
worst was over.

   "Little did we know that a combination of not enough GDUs (growing degree 
units) in August and September and a very cold and humid October left a lot of 
our corn from reaching full maturity and drying down. We grow a range from 81- 
to 88-day corn. In November, the early stuff was low to mid-20% range while the 
later was 28% to 30% moisture. Test weights range from 44 to 52 lbs./bu wet, 
depending on hybrid. The FM (foreign material) is higher in general this year, 
but way worse in the really wet, immature stuff. 

   "So far to date we've combined about 25% of our corn crop, most of it being 
earlier maturities. The fields we have left are a lot of hybrid side-by-side 
trials of all different maturities scattered throughout the fields. We are 
going to have to blend all these together to bring up the average test weight; 
what better way to do it than right in the field as we combine. We are going to 
have to wait a bit longer to lower the average moisture, and to try and 
preserve the test weight as much as possible. We are still going out every 
couple weeks to sample and the really wet 28% to 30% is now down to 25% to 
26%."  

   Ryan Wagner, Wagner Farms, Roslyn, South Dakota, told me that they didn't 
quite finish corn harvest before the late December weekend storm, but did get 
close. "Many in the area are either done or very close to done, but there still 
is quite a bit of corn standing in northeast South Dakota, especially north of 
highway 212. We have about 10% still standing in the field and hope to be able 
to get at that as soon as the snow gets off the plants or it gets cold enough 
to flow through; we will just have to take a loader tractor with us wherever we 
go.

   "It's been a tough weather year, but since the ground has been frozen we 
haven't had much trouble getting around in fields and haven't been stuck 
outside of the occasional truck needing a pull because we couldn't get traction 
in the snow. Yields have been pretty good considering we didn't quite make it 
to maturity, and if we would have had any heat at all in late August and 
September to finish it off, we could have had record yields."  

   Wagner said that when they started corn harvest back on Nov. 2 the moisture 
was 26% to 28%, but it dropped down into the 20% to 22% range when they were 
last in the field Dec. 23 ahead of the storm. "Moisture discounts are pretty 
similar to what they have been in a "normal year," with 5 cents per 1% of 
moisture pretty much covering it, with some locations bumping that up for very 
high moisture corn in addition to the typical shrink schedule. Of course, some 
locations do not have dryers or have limited drying capacity so it's all 
subject to how much room they have for wet corn as well," said Wagner.

   "Test weights have been mostly in the 50 to 54 lbs./bu range dry here, with 
a few really late planted acres coming in around 48 lbs./bu. The test weight 
discounts are really all over the board; ethanol plant discounts of 1 cent per 
1/2 lb. under 54 lbs. have been pretty typical, with a steeper discount of 2 
cents per 1/2 lb. under 50 lbs. if they will take it. Shuttle loader terminals 
are more punitive with 3 cents to 5 cents per 1/2 lb. from 50 to 54 lbs. and 
are more likely to have zero wiggle room on rejecting sub 50 lb. corn. I have 
heard some pretty bad horror stories farther north, but around here, I haven't 
heard of anyone who hasn't been able to find a home for corn. I'm guessing it 
probably helps that we have a strong ethanol demand pull coming from our south 
due to all the prevented planting in southeast South Dakota," added Wagner.

   Tim Luken, manager Oahe Grain in Onida, South Dakota told me, "Corn harvest 
started the 24th of October and we dumped corn still on the 27th of December. I 
am sure we will be dumping new-crop corn every week until spring if they can 
get to it. We have dumped 1.7 million bushels and average moisture was 19.2%, 
with average test weight at 53.5 lbs./bu. Needless to say, I am very pleased 
with the test weight." Luken said that they dried 100% of their new-crop corn 
and was glad they used natural gas and did not have to deal with the propane 
shortages.

   "The early corn harvested late October through middle part of November was 
in the 52.5 to 56 lbs./bu range, but as the calendar clicked by, the test 
weight went down into the 48.5 to 50 lb. range. Fortunately, we have an outlet 
for light test weight corn to local and statewide ethanol plants. The recent 
major snowstorm that dumped 12 to 14 inches of snow, if not more, has shut 
things down for a while. Hats off to my employees who have done an outstanding 
job of dealing with Mother Nature," added Luken.

   "As far as harvest conditions go, we were very fortunate compared to some," 
said Kenny Reinke, Neligh, Nebraska. "We are used to running in snow so that 
wasn't anything more than an annoyance to us. One thing we are not used to 
having to deal with is wet soil conditions. I'm still fighting wet soil 
conditions in one field from spring that we couldn't get all planted. Luckily, 
the combine didn't get stuck, but we had a couple close calls.

   "After wrapping up bean harvest, we started in on corn Oct. 16, which is a 
pretty average date for us, but the corn was easily 3 to 4 points wetter than 
we are used to. Our normal harvest moisture is 15% to 18%. Luckily, the delayed 
harvest meant there were opportunities out there also. The first field was 
taken out wet to take advantage of a drying incentive program for a local 
elevator so they could have enough non-GMO corn on hand to ship. On the 
opposite end of the spectrum, you also really had to shop around on the drying 
changes. Some were as high as 6 cents a point to a more normal rate of 3 cents 
per point. 

   "After delivering the wet corn the elevator wanted for the program, I sat 
for 7 to 10 days waiting and hoping the corn would still dry down some. Corn 
had a very long delayed black layer fill, which caused some of it to be damaged 
slightly from the frost. This definitely caused some of our dry down and test 
weight issues. We stayed consistently in the 20 to 17.5 moisture levels all the 
way through harvest. 

   "We are traditionally a field drying area, which makes years like this a 
challenge. Thankfully, the elevators really increased drying capacity since 
2009. This doesn't solve the problem of on-farm storage though. This delayed 
harvest left many area farmers waiting for corn to dry enough to be bin stored. 
The quality of the grain was very noticeable this year; in a bad way. Increased 
fines (material smaller than whole corn kernels) have been very noticeable this 
year in the stored grain. The later harvest also means less opportunity to 
capture quality fan drying days while the corn is bin stored. 

   "On average, our test weights are down 1.5 to 2 lbs./bu," said Reinke. "They 
varied from 60 to 54 lbs./bu and no doubt this won't help the stored corn. Our 
yields came in right in line with farm averages, which is good considering the 
year we went through. Year-over-year yields are down dramatically but 2018 was 
also an exceptional year. It's going to be interesting to see how the higher 
moisture and lower test weight affect the disappearance of the crop."

   Randy Uhrmacher, Hastings, Nebraska, said his harvest started a little later 
than normal this year as the crops wouldn't dry down as he would have liked 
them to. "We did get a hard-killing freeze followed by about a week of warmer 
windy weather that changed all of that. At that point, everything dried very 
well. We did have a couple of snow delays, but they were short lived and we 
finished the first part of November. Yields were off from the last couple of 
years, but about like expected after the challenging year we had. Just too many 
bad days for record crop yields."

   "We started corn on Oct. 23," said Quentin Connealy, Tekamah, Nebraska. 
"When we started out, the corn was a touch wet, but not bad considering the 
year. It was 18.5% to 19% when we started and hauled most of it to the elevator 
since we don't have a drying bin. Once the corn got under 18%, we started 
putting it in the bin. 

   "We got our corn planted fairly good on timing, so we didn't have much 
drying issues like other areas. Test weights were all solid to ranging from 58 
to 61 lbs. across the board. We are mostly irrigated so that helped keep our 
test weights up along with some late rains. Yields were pretty good but 
figuring down 5% to 10% from last year. Similar to beans, we were happy with 
all our corn that stayed above floodwaters. I lost 290 acres of my April 23 
planted corn, so that was especially sad. We finished harvest Nov. 22 with some 
great help from our neighbor Tim Gregerson, who brought his combine over to run 
along with us. It felt like a long harvest, but overall went fairly smooth, and 
we were sure glad to be done before Thanksgiving." 

   LATE HARVEST CAUSES DOMINO EFFECT 

   "Farmers who harvested wet corn and were unable to dry it down all the way 
before storing it will have to keep a sharp eye on their bins this winter. It 
was hard to weigh the risk of leaving the corn in the field against putting it 
in the bin too wet. It's going to be interesting come next spring as 
temperatures start to warm up and then we see how well some of this grain 
keeps," said Reinke. 

   Here is a link to SDSU extension discussing storing wet corn and late 
harvest options: 
https://extension.sdstate.edu/wet-corn-storage-and-late-harvest-options

   Backstrom noted that another issue from the late harvest they are going to 
be dealing with is fertilizer application, or lack thereof. "We always try to 
get as much nitrogen on in the fall for next year's wheat and corn, which helps 
take a huge burden off us for the spring. Last year we only got half done, and 
this year we have zero done for spring 2020. We apply NH3 by either strip-till 
knife or coulter. Not only will this cause a logical challenge for us on our 
farm, that's providing we have a decent early spring, (early to mid-April), but 
also since most of the country didn't get much on we will most likely be 
waiting for days at a time for it to show up by truck." 

   Here is a link to more info on strip-till from UNL: 
https://cropwatch.unl.edu/tillage/striptill

   "One caveat from 2019 is that there could potentially be a lot of prevented 
planting next year in parts of the country that were already fully saturated 
before the September rains and October snow," added Backstrom. "In addition, 
some places in North Dakota have already had as much as their annual snowfall 
as well." 

   Brandt agreed. "As wet as we are and lots of snow, (well over 40 inches for 
the season already) with lots of unharvested crop, every elevator and agronomy 
company fears we may see more prevented planting acres in 2020."

   "Prevented planting paid well in 2019," according to Brandt. "You're done 
harvesting and all your equipment is put away."

   Perhaps one of the worst things coming out of 2019 in parts of the Upper 
Midwest is that some farmers may have to stop farming in areas where nearly all 
their crops were affected by poor weather events in 2019. "We've had three 
farms in our area announce they were done," said Krueger. "I suspect this 
number may increase as we get into renewal season and farmers start meeting 
with their lenders. It's not a great environment to be in. Lenders are 
stressed. Farmers are stressed." 

   Krueger added, "Salesman and companies for inputs in 2020 are trying to get 
growers to commit, but there's so much in the air yet."

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly Average DDG Price Steady

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average 
spot price from the 40 locations DTN contacted was unchanged at $150 per ton 
for the week ended Jan. 2. Prices have been steady during the holiday break as 
cash corn prices have been mostly unchanged overall.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Jan. 2 was at 107.28%. The value of DDG relative to 
soybean meal was at 49.90%. The cost per unit of protein for DDG was $5.56, 
compared to the cost per unit of protein for soybean meal at $6.33. 

   In its weekly export DDGS update, the U.S. Grains Council noted, "DDGS 
markets are quiet this week with the New Year's holiday dampening trading 
activity. Merchandisers report that between the holiday, staff vacations, and 
no significant logistics issues, markets are thinly traded and prices are 
mostly in-line with the prior two week's values. Indications for January DDGS 
FOB NOLA are steady while offers for February and March are down $1/MT from 
last week. Conversely, prices for 40-foot containers to Southeast Asia are up 
$1/MT for deferred months, while spot values are unchanged at $246/MT." 

   * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)

   * FOB (free on board means buyer pays costs of ocean freight, insurance, 
unloading, and transportation from originating port)


ALL PRICES SUBJECT TO CONFIRMATION      CURRENT     PREVIOUS  CHANGE
COMPANY    STATE                        1/2/2020   12/19/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri             Dry       $165        $165      $0
                                Wet       $83         $83       $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
           Missouri             Dry       $165        $165      $0
                                Wet       $80         $80       $0
CHS, Minneapolis, MN (800-769-1066)
           Illinois             Dry       $155        $145     $10
           Indiana              Dry       $150        $150      $0
           Iowa                 Dry       $140        $140      $0
           Michigan             Dry       $145        $150     -$5
           Minnesota            Dry       $140        $140      $0
           North Dakota         Dry       $145        $145      $0
           New York             Dry       $155        $155      $0
           South Dakota         Dry       $140        $140      $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas               Dry       $160        $160      $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana              Dry       $155        $155      $0
           Iowa                 Dry       $140        $142     -$2
           Michigan             Dry       $145        $145      $0
           Minnesota            Dry       $139        $140     -$1
           Missouri             Dry       $158        $160     -$2
           Ohio                 Dry       $160        $155      $5
           South Dakota         Dry       $158        $152      $6
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas               Dry       $165        $165      $0
                                Wet       $65         $65       $0
           Illinois FEB         Dry       $160        $155      $5
           Nebraska             Dry       $160        $160      $0
                                Wet       $65         $65       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Subject    Illinois             Dry       $155        $155      $0
Subject    Indiana              Dry       $155        $155      $0
Subject    Iowa                 Dry       $145        $145      $0
Subject    Michigan             Dry       $150        $150      $0
Subject    Minnesota            Dry       $140        $140      $0
Subject    Nebraska             Dry       $165        $165      $0
Subject    New York             Dry       $170        $170      $0
Subject    North Dakota         Dry       $150        $150      $0
Subject    Ohio                 Dry       $160        $160      $0
Subject    South Dakota         Dry       $140        $140      $0
Subject    Wisconsin            Dry       $140        $140      $0
Valero Energy Corp, San Antonio Texas
           Indiana              Dry       $150        $150      $0
           Iowa                 Dry       $135        $135      $0
           Minnesota            Dry       $135        $135      $0
           Nebraska             Dry       $145        $145      $0
           Ohio                 Dry       $155        $155      $0
           South Dakota         Dry       $140        $140      $0
           California           Dry       $208        $208      $0
Western Milling, Goshen, California (559-302-1074)
           California           Dry       $216        $218     -$2
*Prices listed per ton.
           Weekly Average                 $150        $150      $0
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

             VALUE OF DDG VS. CORN & SOYBEAN MEAL
               Settlement Price: Quote Date   Bushel Short Ton
                            Corn    1/2/2020 $3.9150   $139.82
                    Soybean Meal    1/2/2020 $300.60
   DDG Weekly Average Spot Price     $150.00
                      DDG Value Relative to:   1/2     12/19
                                        Corn 107.28%   108.67%
                                Soybean Meal  49.90%    50.27%
                   Cost Per Unit of Protein:
                                         DDG   $5.56     $5.56
                                Soybean Meal   $6.33     $6.28
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
FDA Inspections on the Rise to Ensure Facilities are FSMA Compliant

   The Food Safety Modernization Act (FSMA) includes a rule called the 
"Sanitary Transportation of Human and Animal Food," which was created to 
protect foods from farm to table by keeping them safe from contamination during 
transportation. National Grain and Feed Association (NGFA) Senior Vice 
President of Feed Services David Fairfield spoke at the Nebraska Grain and Feed 
Association winter meeting on Dec. 17 about FSMA inspections and reviewed the 
Sanitary Transportation rule, clarifying the requirements for ag related 
businesses. 

   As a reminder, the rule establishes requirements for shippers, loaders, 
carriers by motor or rail vehicle, and receivers involved in transporting human 
and animal food to use sanitary practices to ensure the safety of that food. 
According to the FDA, the requirements do not apply to transportation by ship 
or air because of limitations in the law. FDA's final rule largely exempts rail 
carriers and truckers from the rule's requirements unless the shipper and 
carrier have a written agreement (e.g., contractual arrangement) making the 
carrier or another party responsible, in whole or in part, for sanitary 
conditions during the transportation operation. The rule defines a "carrier" to 
mean "a person who physically moves food by rail or motor vehicle in commerce 
within the United States," excluding persons who transport food while operating 
as a parcel delivery service.

   Exemptions from the Sanitary Transportation of Human and Animal Food rule 
include:

   -- Shippers, receivers, or carriers engaged in food transportation 
operations that have less than $500,000 in average annual revenue.

   -- Transportation activities performed by a farm.

   -- Transportation of food that is transshipped through the United States to 
another country.

   -- Transportation of food that is imported for future export and that is 
neither consumed or distributed in the United States.

   -- Transportation of compressed food gases (e.g. carbon dioxide, nitrogen or 
oxygen authorized for use in food and beverage products) and food contact 
substances.

   -- Transportation of human food byproducts transported for use as animal 
food without further processing.

   -- Transportation of food that is completely enclosed by a container except 
a food that requires temperature control for safety.

   -- Transportation of live food animals, except molluscan shellfish.

   "The most responsible party for enduring the safety of food transportation 
is the shipper," said Fairfield. "Shippers, loaders, carriers and receivers all 
need to comply." Fairfield also noted that many companies are asking about 
prior loads before loading an empty vehicle -- a good practice to follow. 

   Fairfield noted that while compliance dates have passed for this rule, FDA 
is inspecting more facilities than they have in the past. FDA inspections will 
encompass all the FSMA rules your facility is expected to comply with and can 
last four to five days. Fairfield also noted that FSMA compliance inspections 
are expected to increase in 2020.

   "Facility managers should be familiar with the regulations and how they 
apply to their operation. They should train the appropriate employees, develop 
programs that demonstrate compliance, including record keeping and have an 
inspection plan in place," said Fairfield. "A comprehensive plan to prepare for 
an inspection should address the potential scope of the inspection, questions 
an FDA inspector may ask and guidelines on handling record requests."

   Fairfield said it is very important for facilities to establish and maintain 
required records. "All of the FSMA rules have provisions that specifically 
require certain procedures and activities to be documented. The FDA has the 
right to access, review and copy any required record. Having all of these 
required records in place is essential for a facility to demonstrate 
compliance. Facilities should include in their inspection plans which records 
the investigator would be allowed to access and copy."

   Below are links to the FSMA rules and a link to the NGFA guidance for FDA 
inspections.

   Link to information about Sanitary Transportation of Human and Animal Food 
rule: 
https://www.fda.gov/food/food-safety-modernization-act-fsma/key-changes-fsma-fin
al-rule-sanitary-transportation-human-and-animal-food

   Link to information about the FSMA: 
https://www.fda.gov/food/guidance-regulation-food-and-dietary-supplements/food-s
afety-modernization-act-fsma

   Link to NGFA guide "Rights and Obligations During FDA Inspections":

   
https://www.ngfa.org/news/feed-news/ngfa-unveils-new-guide-rights-obligations-fd
a-inspections/

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly Average DDG Price Stronger 

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average 
spot price from the 40 locations DTN contacted was up $5 at $150 per ton for 
the week ended Dec. 19. Prices jumped higher as buyers have been securing their 
December needs ahead of the holidays, causing some locations to be short on 
spot product.

   The Energy Information Administration noted in their weekly supply report 
that ethanol supply in the U.S. was unchanged at 21.8 million barrels (bbl) for 
the week ended Dec. 13, according to data released Wednesday morning. Blending 
demand was up a sharp 6.3% on the week while plant production eased.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Dec. 19 was at 108.67%. The value of DDG relative to 
soybean meal was at 50.27%. The cost per unit of protein for DDG was $5.56, 
compared to the cost per unit of protein for soybean meal at $6.28. 

   In its weekly export DDGS update, the U.S. Grains Council noted, "The U.S. 
DDGS market is mixed this week with Barge CIF NOLA and FOB Gulf values firmer 
while rail-delivered rates are down $2 per metric ton (mt). Merchandisers are 
reporting the forward curve for DDGS has flattened versus last week. FOB NOLA 
offers average $216/mt for January shipment while the average price for 40-foot 
containers to Southeast Asia stands at $246/mt. Buyers in Indonesia and the 
Philippines remain active, with offers for containerized shipments to those 
countries up $2-$3/mt this week." 

   Containers trying to make their way to the Gulf are experiencing slowdowns 
along the way. The St. Louis harbor was closed for a few days this past week 
after a barge fleet broke away during a winter storm. American Commercial Barge 
Line noted Dec. 19 that tow sizes are reduced on the Lower Mississippi River 
with southbound tows cut back by a string of barges (five) due to high river 
levels.

   * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)

   * FOB (free on board means buyer pays costs of ocean freight, insurance, 
unloading, and transportation from originating port)


ALL PRICES SUBJECT TO CONFIRMATION           CURRENT       PREVIOUS     CHANGE
COMPANY     STATE                          12/19/2019     12/12/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri               Dry        $165           $162         $3
                                   Wet         $83            $81         $2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
            Missouri               Dry        $165           $165         $0
                                   Wet         $80            $80         $0
CHS, Minneapolis, MN (800-769-1066)
            Illinois               Dry        $145           $135        $10
            Indiana                Dry        $150           $140        $10
            Iowa                   Dry        $140           $135         $5
            Michigan               Dry        $150           $150         $0
            Minnesota              Dry        $140           $135         $5
            North Dakota           Dry        $145           $135        $10
            New York               Dry        $155           $155         $0
            South Dakota           Dry        $140           $125        $15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas                 Dry        $160           $160         $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana                Dry        $155           $150         $5
            Iowa                   Dry        $142           $142         $0
            Michigan               Dry        $145           $135        $10
            Minnesota              Dry        $140           $140         $0
            Missouri               Dry        $160           $160         $0
            Ohio                   Dry        $155           $150         $5
            South Dakota           Dry        $152           $150         $2
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas                 Dry        $165           $150        $15
                                   Wet         $65            $55        $10
            Illinois/FEB           Dry        $155           $153         $2
            Nebraska               Dry        $160           $150        $10
                                   Wet         $65            $60         $5
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois               Dry        $155           $150         $5
            Indiana                Dry        $155           $150         $5
            Iowa                   Dry        $145           $140         $5
            Michigan               Dry        $150           $145         $5
            Minnesota              Dry        $140           $135         $5
            Nebraska               Dry        $165           $160         $5
            New York               Dry        $170           $165         $5
            North Dakota           Dry        $150           $145         $5
            Ohio                   Dry        $160           $155         $5
            South Dakota           Dry        $140           $135         $5
            Wisconsin              Dry        $140           $135         $5
Valero Energy Corp, San Antonio Texas
            Indiana                Dry        $150           $150         $0
            Iowa                   Dry        $135           $135         $0
            Minnesota              Dry        $135           $135         $0
            Nebraska               Dry        $145           $145         $0
            Ohio                   Dry        $155           $155         $0
            South Dakota           Dry        $140           $140         $0
            California             Dry        $208           $208         $0
Western Milling, Goshen, California (559-302-1074)
            California             Dry        $218           $215         $3
*Prices listed per ton.
            Weekly Average                    $150           $145         $5
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn     12/19/2019   $3.8650      $138.04
                             Soybean Meal     12/19/2019   $298.40
            DDG Weekly Average Spot Price        $150.00
                                  DDG Value Relative to:   12/19      12/12
                                                    Corn   108.67%      110.85%
                                            Soybean Meal    50.27%       49.06%
                               Cost Per Unit of Protein:
                                                     DDG     $5.56        $5.37
                                            Soybean Meal     $6.28        $6.22
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow her on Twitter @MaryCKenn

******************************************************************************

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