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Market Matters Blog 01/17 11:30
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
2019 Just Won't Go Away
DTN Weekly Average DDG Price Moves Higher
UMR 2019 Barge Navigation Season Ends; Duluth Grain Shipping End Near
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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
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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
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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
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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
******************************************************************************
2019 Just Won't Go Away
This year will go down in history as one of the most challenging for Midwest
producers. Thanks to a persistent wet pattern from spring to winter, producers
fought wet fields during planting, heavy moisture during small grain harvest
and snowstorms during fall harvest. For some, the season has not ended as
harvest drags out in the Upper Midwest and will carry into 2020. One of the
largest concerns for producers during winter meetings has been the moisture
levels in their fields and what that may mean for spring next year without a
massive change in weather patterns. A closer look at the amount of prevented
planting acreage and some of the weather records set in 2019 helps put into
perspective the challenges waiting in 2020.
Final planted acreage data from the Farm Service Agency (FSA) will be
released in January for the 2019-20 growing season. As of Dec. 1, FSA said U.S.
producers planted 236.5 million acres of barley, corn, cotton, oats, rice,
sorghum, soybeans, sugar beets, sugarcane and wheat. This is the lowest acreage
pie on record for the available FSA data that goes back to 2007. The next
closest year was 238.7 million acres in 2010 following the incredibly wet fall
of 2009.
A record amount of prevented planting acreage was also seen in 2019,
totaling 19.6 million acres for the aforementioned crops with 2011 a distant
second at 9.6 million acres. Another metric we looked at that helps put the
amount of prevented planting into perspective is prevented planting acres as a
percentage of the total planted acreage pie. In 2019, prevented planting
amounted to 8.29% of the total planted acreage pie, far and away the highest on
record with 2011 once again second at 3.34%. Said another way, the U.S. saw
almost one acre of prevented planting for every 10 acres planted, which is
truly an astonishing amount.
The largest prevented planting category belonged to corn at 11.4 million
acres, which is not a surprise given the favorable economics for electing corn
over any other cash crop. This likely led to producers electing corn prevented
planting as opposed to a crop that they may have actually been planning to
seed, but had lower guaranteed insurance payouts.
Leading all states with prevented planting acreage was South Dakota at 3.9
million acres, followed by Ohio at 1.5 million, Illinois at 1.5 million and
Missouri at 1.4 million. Other notables included Minnesota at 1.1 million acres
and North Dakota at 856,913 acres.
For states in the Plains, such the Dakotas and Minnesota, many of those
prevented planting acres never allowed producers to get in fields and either
seed a cover crop, plant winter wheat or do appropriate tillage work to help
dry fields. In some cases, standing water never receded at any point during the
growing season.
As most producers will point out, a field that sits completely idle for an
entire year loses soil structure and water-holding capacity, hindering its
ability to shed water during the following year. A quick look at the finish to
the growing season in these areas helps to illustrate just how saturated those
prevented planting acres are heading into next season.
The National Oceanic and Atmospheric Administration's (NOAA) National
Centers for Environmental Information publishes monthly maps detailing
precipitation and temperature ranks relative to history from a national and
statewide perspective. For the three-month period of September through
November, precipitation rankings were very high for the Upper Midwest. The
region including Nebraska, South Dakota, North Dakota, Montana and Wyoming
recorded the third wettest period on record going back 125 years. Within that
region, North Dakota saw the wettest September-November stretch on record while
South Dakota saw the fourth wettest period on record. The region consisting of
Iowa, Minnesota, Wisconsin and Michigan did record the wettest
September-November on record. Within that region, the wettest
September-November periods were seen by Minnesota and Wisconsin with Michigan
the second wettest on record and Iowa the fifth wettest on record.
Just for perspective, we also took a look at the six-month period from June
through November to see if any records were set for the entirety of the growing
season. Once again, the Dakotas did not disappoint with both North and South
Dakota seeing the wettest June-November stretch on record. Minnesota, Wisconsin
and Michigan all saw the top five wettest growing seasons on record as well.
Regardless of how one wants to slice up the growing season, the fact is a
record amount of prevented planting acres were enrolled in 2019 and the weather
the last three to six months ensured those acres are as saturated as possible
heading into winter.
While weather conditions experienced over the last six months can tell us a
lot, much more depends on the weather in the next six months as to whether we
can count on a repeat of 2019 or a turnaround in fortunes.
At the 2019 DTN Ag Summit in Chicago in early December, DTN Meteorologist
Bryce Anderson gave his outlook for the upcoming winter and spring. In general,
Anderson is expecting a good chance of below normal temperatures for the last
half of winter and into spring. In addition, above normal precipitation is
expected over the central United States, especially in the Midwest through the
Northern Plains. The wetter signal continues through the spring and raises
prospects for a slow start to fieldwork and another round of flood threat.
As Anderson pointed out, there are five components to spring flood threats
including: 1) high soil moisture in the fall; 2) frozen ground into early
spring; 3) high snowpack; 4) a rapid spring melt; 5) spring rainfall itself.
Looking at the five conditions, it is quite clear that the first condition has
already been met. If the forecast for above normal precipitation and below
normal temperatures bears out, the second, third and fifth conditions could be
added to the list.
Both public and private groups have been out in recent weeks with early
estimates for 2020-21 planted acreage, as is common this time of year. Most are
expecting a sizable portion of 2019's record prevented planting acreage to come
back into the fold for the 2020 growing season. While this certainly looks
possible for states like Ohio, Illinois and Missouri, it will be a much more
daunting challenge for states in the Northern Plains. A total of 10.9 million
acres of prevented planting saw a top five wettest fall on record, a conclusion
to a growing season no one needed. Without a shift to below normal
precipitation and above normal temperatures before spring, it is difficult to
see how many of these fields can be brought back into production in 2020.
If forecasters are correct about a cool, wet pattern holding until spring,
new crop grain prices will need to carry above average risk premium until fears
can be allayed. At the very least, the natural seller in the market -- the
farmer -- will remain a hesitant marketer until 2020 proves it isn't going to
be a repeat of 2019.
Tregg Cronin can be reached at tmcronin31@gmail.com
Follow Tregg Cronin on Twitter @5thWave_tcronin
******************************************************************************
DTN Weekly Average DDG Price Moves Higher
OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average
spot price from the 40 locations DTN contacted was up $1 at $145 per ton for
the week ended Dec. 12. Prices remained firm in spite of a cheaper cash corn
price this past week. A merchandiser told DTN there are a few areas running
short on product.
The Energy Information Administration noted in their weekly supply report
that ethanol inventory in the U.S. increased to a five-week high, while
blending activity fell to the second lowest weekly rate of 2019. In addition,
domestic plant production was up for a tenth consecutive week for the week
ended Dec. 6.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Dec. 12 was at 110.85%. The value of DDG relative to
soybean meal was at 49.06%. The cost per unit of protein for DDG was $5.37,
compared to the cost per unit of protein for soybean meal at $6.22.
In its weekly export DDGS update, the U.S. Grains Council noted, "The U.S.
DDGS market is quiet this week with Barge CIF NOLA and FOB NOLA offers $1 to $2
per metric ton (mt) higher. DDGS rail-delivered to the PNW are up $3/mt this
week for December shipment and up $1/mt for January/February. Prices for
containers to Southeast Asia are mostly higher this week, with offers $2/mt
higher than last week for spot shipment and up $1/mt for deferred positions.
The average price for 40-foot containers to Southeast Asia reached $244/mt for
December and $243/mt for January/February."
* 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 12/12/2019 12/5/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $162 $162 $0
Wet $81 $81 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $165 $165 $0
Wet $80 $80 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $135 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $155 $150 $5
South Dakota Dry $125 $125 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $160 $155 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $150 $0
Iowa Dry $142 $138 $4
Michigan Dry $135 $135 $0
Minnesota Dry $140 $137 $3
Missouri Dry $160 $155 $5
Ohio Dry $150 $150 $0
South Dakota Dry $150 $150 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $55 $55 $0
Illinois Dry $153 $153 $0
Nebraska Dry $150 $150 $0
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $145 $5
Indiana Dry $150 $145 $5
Iowa Dry $140 $145 -$5
Michigan Dry $145 $140 $5
Minnesota Dry $135 $135 $0
Nebraska Dry $160 $150 $10
New York Dry $165 $165 $0
North Dakota Dry $145 $135 $10
Ohio Dry $155 $150 $5
South Dakota Dry $135 $135 $0
Wisconsin Dry $135 $135 $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 $150 $5
South Dakota Dry $140 $140 $0
California Dry $208 $208 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $215 $218 -$3
*Prices listed per ton.
Weekly Average $145 $144 $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 12/13/2019 $3.6625 $130.80
Soybean Meal 12/13/2019 $295.50
DDG Weekly Average Spot Price $145.00
DDG Value Relative to: 12/12 12/5
Corn 110.85% 110.31%
Soybean Meal 49.06% 48.08%
Cost Per Unit of Protein:
DDG $5.37 $5.33
Soybean Meal $6.22 $6.31
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.
* 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)
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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UMR 2019 Barge Navigation Season Ends; Duluth Grain Shipping End Near
The start of the 2019 navigation season in the Upper Mississippi River (UMR)
was late and drawn out. The Motor Vessel Aaron F. Barrett, pushing 12 barges
heading to St. Paul, Minnesota, finally locked through Lock and Dam 2 near
Hastings on April 24. The average date for the first tow to reach St. Paul is
around March 18. The historic flooding and ensuing lock closures kept most of
the entire UMR closed on and off for months, including the closure of the St.
Louis Harbor shutting down barges from moving up or downriver through there on
three different occasions in the late spring and early summer.
"Following the Barrett, there would not be another tow to reach St. Paul for
more than three weeks due to spring flooding," said the U.S. Army Corps of
Engineers St. Paul District (USACE, Corps). "The second tow to reach the
capital city was the Motor Vessel Thomas E. Erickson on May 20."
When barges were finally able make their way in to the UMR, the late corn
and soybean harvest left hundreds of barges parked along the Mississippi River
in St. Paul from late summer through November. Many of those empty barges were
moved back downriver ahead of the winter closure.
The St. Paul District Corps reported the last tow of the season, Motor
Vessel Kelly Rae Erickson, departed St. Paul, Minnesota, Thursday, Nov. 28,
"bookmarking" a challenging navigation season.
"There were more than 12,000 commercial vessels and 77 million tons of
commodities shipped this season. The shorter navigation season resulted in
approximately a 30% drop in tonnage compared to the 2018 navigation season and
about 25% drop from the 10-year average," noted the Corps.
"The 2019 navigation season was one of the more challenging seasons we've
had in a while," said Jim Rand, St. Paul District locks and dams chief. "We had
a really late start due to Mother Nature and fought high water much of the
summer. Fortunately, we were able to work with our partners and keep the system
open to ensure commodities such as corn and soybeans could reach global
markets."
WINTER CLOSURE ALLOWS UNINTERRUPTED KEY MAINTENANCE ON UMR
The Corps noted there will be major repairs at three of its locks over the
winter "to ensure they continue working as designed." Maintenance is scheduled
at Lock and Dam 6, near Trempealeau, Wisconsin; Lock and Dam 8, near Genoa,
Wisconsin; and Lock and Dam 9, near Lynxville, Wisconsin, Dec. 10 through March
13, 2020.
"The work includes concrete repairs and repairs to the tow haul rail system,
which is used to move barges upstream of the lock chamber when a tow is heading
north and there is a need to break the tow into two lockages. A tow with more
than six barges must be split up when going through a lock due to size
limitations," said the Corps.
All of the construction activities are scheduled to be completed during the
winter to avoid impacts to the navigation industry. The completed work will
improve safety for Corps lock operators and industry deckhands.
"Having the tow haul rail system working is critical to keeping our lock
staff safe and ensuring navigation vessels can efficiently lock through our
facilities," said Rand. "With a lot of this infrastructure more than 80 years
old, it's critical that we find value-added solutions to maintain the system
and ensure navigation continues transporting commodities made in the upper
Midwest to global markets."
The construction activities are a part of more than $18 million dollars in
scheduled repairs at the St. Paul District locks over the next three years.
GREAT LAKES GRAIN SHIPPING SEASON ENDING
On Dec. 4, the St. Lawrence Seaway published SEAWAY NOTICE NO. 17, "Closing
of the 2019 Navigation Season," detailing the closing dates for various locks
and ports ahead of the winter closure. All vessels must be clear of the
Montreal-Lake Ontario section of the St. Lawrence Seaway at 1200 hours on Dec.
31, 2019, according to the Seaway notice.
Click here to see the notice:
https://dtn.box.com/s/6nrsgrfchuda7nst768d0wce7uv17czg
As part of a season extension pilot program this navigation season, the
Welland Canal will remain open until 1200 hours on Jan. 8, 2020. Then,
according to the USACE, the Soo Locks will close Jan. 15, 2020, ending the 2019
Great Lakes shipping season.
At the western tip of Lake Superior and located 2,300 miles from the
Atlantic Ocean, the Port of Duluth-Superior is the farthest-inland freshwater
seaport in North America and one of the leading bulk cargo ports in all of
North America. By far, the largest and busiest on the Great Lakes, the Port of
Duluth-Superior handles an average of 35 million short tons of cargo and nearly
900 vessel visits each year, connecting the heartland of the U.S. and Canada to
the rest of the world, according to the Duluth Seaway Port Authority.
The Twin Ports of Duluth, Minnesota, and Superior, Wisconsin, handle a
diversified commodities base ranging from coal, iron ore, grain, and limestone
to cement, salt, wood pulp, steel coil, wind turbine components, and other
heavy lift/dimensional equipment, notes the Port Authority on their website.
Two distinct types of ships visit the Port on a regular basis. "Lakers" are
bulk carriers specially built to move through the Great Lakes St. Lawrence
Seaway. "Salties" are ocean-going vessels that haul mainly wheat and durum out
of the Twin Ports to Europe and North Africa and are the last vessels to arrive
in the spring once the winter ice is navigable.
The grain shipping season out of the Port of Duluth-Superior will likely end
before Christmas. I asked Jayson Hron, Director of Communications and
Marketing, Duluth Seaway Port Authority, when the last grain ship would be
leaving Duluth. "It takes approximately five days for a ship to travel from
Duluth to Montreal, so it would have to depart Duluth by Dec. 26 at the latest.
Typically, the last saltie departs Duluth-Superior earlier than that. Our
latest saltie departure on record is Dec. 22. Usually the last saltie departs
sometime between Dec. 18-22,"said Hron.
As of Dec. 7, there was ice already forming along the shorelines of Lake
Superior and Lakes Michigan, Huron and Ontario, according to NOAA. While ice
coverage is less than 1% and won't hamper vessels heading out of Duluth ahead
of the winter closure yet, there are ice breakers available to guide vessels
through ice if and when it becomes difficult to break through.
Similar to the UMR, the Great Lakes locks will undergo critical maintenance
over the winter by USACE, Detroit District, who maintains a navigation system
of 95 harbors, including the Great Lakes Connecting Channels that join lakes
Superior, Michigan, Huron, St. Clair and Erie.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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