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Market Matters Blog 07/15 11:50
Lower Mississippi River to Gulf Under Siege Again
DTN Weekly DDG Average Price Remains Steady
Corn Basis Heats Up With No Sign of Cooling Off
Trucking Hours of Service Reform Still Up in the Air
DTN Weekly DDG Average Price Steady
2019 Spring Wheat Acres Down: What Did Get Planted Went in Late
DTN Weekly DDG Average Price Higher
Flooding Keeps Chokehold on Barge Traffic, Stalling Grain Shipments
DTN Weekly DDG Average Price Strengthens
HRW Wheat Begins New Crop Year
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Lower Mississippi River to Gulf Under Siege Again
It's no secret that it's been a very rough year so far on the entire
Mississippi River System. Never-ending rains have kept water levels high,
closing many locks and dams more than once and shuttering the St. Louis Harbor
numerous times, virtually stopping any traffic north or south of there. In
fact, the Lower Mississippi River (LMR) has experienced continued flooding
events since February 2019.
In the Upper Mississippi River (UMR), Locks 11 through 27 from the
Illinois-Wisconsin border to St. Louis have been closed on and off over three
months due to flooding conditions.
The Mississippi River at St. Louis has been at or above flood stage for 108
consecutive days as of July 2, topping the previous record of 104 days set
during the Great Flood of 1993. The flooding caused the U.S. Coast Guard to
close the harbor twice when the levels reached above 38 feet. Between those
closures and the lock and dam closures, loaded and/or empty barges were stuck
in the UMR with nowhere to go.
In the LMR at Vicksburg, Mississippi, the river was at 49.08 feet on July 15
(major flood stage is 50 feet) and is not expected to fall below flood stage
until the end of July. In Baton Rouge, Louisiana, the river has been in flood
stage most of 2019 and now, thanks to Barry, it may be until August when the
Mississippi River there slips below flood stage. As of July 15, the river there
was above major flood stage (35 feet) at 42.17 feet.
The river stage in New Orleans has been in its longest sustained flood stage
level on record. The National Weather Service surge prediction on the
Mississippi River there, because of Barry, was originally expected to be at 19
to 20 feet. The actual surge crest pushed the river to 16.93 feet late in the
evening of July 12. The water level is not expected to go below 16 feet until
late July, according to current predictions.
"The historically high water levels throughout the inland waterway system,
including in the lower Mississippi River near the Gulf of Mexico, have been a
consistent struggle for barge transportation feeding into the lower Mississippi
River and have impeded the ability to load ocean vessels to their normal
capacity," said Mike Steenhoek, executive director of the Soy Transportation
Coalition. "The 256-mile stretch of the Lower Mississippi River from Baton
Rouge, Louisiana, to the Gulf of Mexico accounts for 60% of U.S. soybean
exports and 59% of U.S. corn exports, by far the leading export region for both
commodities."
On July 9, the bar pilots (those responsible for navigating ocean vessels
into and out of the lower Mississippi River), suspended all ships entering and
exiting the lower river at the Southwest Pass due to the impending arrival of
Barry. "As a result of that closure, soybean and grain exporters in the region
will not be receiving or launching any vessels until the suspension has been
lifted," said Steenhoek. "I am aware of soybean and grain exporters along the
lower Mississippi River declaring force majeure, a provision in a contract that
relieves a party (the soybean and grain exporter, in this case) from fulfilling
the contract obligation due to events, like weather, that are outside their
control."
BARGE MOVEMENTS TO THE GULF JUST STARTED TO RECOVER
In their weekly Grain Transportation Report, USDA noted for the week ended
July 6, barge grain movements totaled 779,876 tons, a 5% increase from the
previous week and 33% lower than the same period last year. For the week ended
July 4, 26 ocean-going grain vessels were loaded in the Gulf. This is 8% more
than the same period last year.
Back in late June, when the St. Louis Harbor was closed, along with many of
the locks in the UMR, USDA noted for the week ended June 22, barge grain
movements totaled 161,662 tons. That was a 51% decrease from the previous week
and 85% lower than the same period last year. For the week ended June 20, 21
ocean-going grain vessels were loaded in the Gulf, 28% fewer than the same
period last year
For the week ended June 8, data for barge grain movements was not available
because barges were stopped from moving south through Lock and Dam 27 on the
Mississippi River because lock closures in the UMR and the flooding in the St.
Louis that closed the harbor.
Mike Steenhoek said, "Our disruption in trade has impeded farmers' ability
to market their crop. Flooding this year has complicated farmers' ability to
transport that crop. We were finally starting to see some relief along the
inland waterway system and southern Louisiana. According to the USDA for the
week ended June 29, 373 soybean and grain barges were unloaded in the New
Orleans area, a 41% increase from the previous week.
"Unfortunately, Tropical Storm Barry is imposing itself on this critical
area of the agricultural logistics chain, which will only further encumber our
ability to meet customer demand," added Steenhoek.
Here is a link to the NWS Lower Mississippi River Forecast Center:
https://www.weather.gov/lmrfc/
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DTN Weekly DDG Average Price Remains Steady
OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price
from the 40 locations DTN contacted was unchanged at $141 per ton for the week
ended July 11. DDG prices were mixed this week as lower seasonal demand has
come into play for prices and feeders also have other competing feeds to choose
from.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended July 11 was at 88.17%. The value of DDG relative to
soybean meal was at 45.25%. The cost per unit of protein for DDG was $5.22,
compared to the cost per unit of protein for soybean meal at $6.56.
The midweek Energy Information Administration report noted ethanol plant
production dropped 3.1% to a five-week low. However, there was a roughly
200,000-barrel (bbl) build in ethanol stocks, pushing total supply to 23
million bbl, a six-week high during the week ended July 5. Margins remain tight
at many plants due in part to the continued rise in the cash corn basis,
especially in the Eastern Corn Belt.
In its weekly export DDGS update, the U.S. Grains Council stated, "Barge CIF
NOLA values are slightly lower while DDGS indications for FOB vessel Gulf are
down $6 per metric ton (mt) for nearby delivery while deferred shipment months
are down only $3/mt. Indications for 40-foot containers to Southeast Asia are
up $2/mt this week."
River conditions in the Lower Mississippi River (LMR), and especially the
Gulf, are worsening, with the Gulf shut down ahead of Tropical Storm Barry that
could potentially become a Category 1 hurricane over the weekend. Southwest
Pass (a channel at the mouth of the Mississippi River that empties into the
Gulf of Mexico) shut down Wednesday afternoon, and vessels that were heading to
the Gulf will wait for the storm to move through.
The Mississippi River at New Orleans is expected to spike to 19 feet
Saturday should there be a storm surge. With expected rainfall of up to 2 feet
falling in New Orleans and into the Lower Mississippi and Tennessee Valley, we
may see the LMR close to barge traffic temporarily until the water recedes.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 7/11/2019 6/27/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $155 $155 $0
Wet $80 $80 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $150 $150 $0
Wet $77 $77 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $147 $150 -$3
Indiana Dry $142 $145 -$3
Iowa Dry $132 $135 -$3
Michigan Dry $142 $145 -$3
Minnesota Dry $132 $135 -$3
North Dakota Dry $132 $135 -$3
New York Dry $152 $155 -$3
South Dakota Dry $132 $135 -$3
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $140 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $170 -$5
Iowa Dry $135 $135 $0
Michigan Dry $140 $140 $0
Minnesota Dry $135 $140 -$5
Missouri Dry $165 $165 $0
Ohio Dry $165 $170 -$5
South Dakota Dry $150 $150 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $145 $120 $25
Wet $40 $45 -$5
Illinois Dry $145 $148 -$3
Nebraska Dry $145 $120 $25
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $130 $130 $0
New York Dry $150 $150 $0
North Dakota Dry $140 $140 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $135 $135 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
California Dry $195 $200 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $205 $214 -$9
*Prices listed per ton.
Weekly Average $141 $141 $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 7/11/2019 $4.4775 $159.91
Soybean Meal 7/11/2019 $311.60
DDG Weekly Average Spot Price $141.00
DDG Value Relative to: 7/11 6/27
Corn 88.17% 89.73%
Soybean Meal 45.25% 45.16%
Cost Per Unit of Protein:
DDG $5.22 $5.22
Soybean Meal $6.56 $6.57
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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Corn Basis Heats Up With No Sign of Cooling Off
Fireworks came early for the corn basis. The national average 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 it doesn't appear to be backing down any
time soon.
DTN collects nearly 4,000 corn bids throughout the U.S., with most of those
bids collected in the central part of the country. The average of all the bids
collected becomes the daily DTN National Corn Index. Since the end of May, the
strongest gains can be seen in Eastern Corn Belt (ECB) states, as this was one
of areas of the U.S. having the most trouble planting this past spring.
In Illinois, th regional average basis was at 24 cents under the July (N)
contract on May 31. On June 26, ahead of the basis roll to the September
futures, Illinois average basis was at -20N. If you looked at basis at certain
elevators or ethanol plants, basis levels at some of those spots were bid in
the range of +10 to +30 above the July futures, according to various comments
from farmers and brokers, as well as bids collected by DTN in that timeframe.
Even though corn supplies are not lacking, in the ECB there is concern that
in areas of the ECB, like Ohio and Missouri, corn acres not planted may
eventually lead to lower stocks, causing end users to have to go outside of
their area to buy corn. Some corn from those areas recently moved to the
southeast market when drought had become a concern for end users needing corn.
Posted basis levels at some plants in Ohio are +65 over the September futures
and farmers are reporting that in many of the Corn Belt states, basis has
turned positive. Many noted that it is not something they remember happening
before at this time of year, as the corn crop has normally been well on its way
to "knee high on the Fourth of July." That's not necessarily the case this
year.
With the cash price of corn becoming expensive, ethanol margins have
weakened and rumors have surfaced that ethanol producers facing negative
production margins are considering importing corn from Brazil. For the month of
June prior to the basis roll to the September futures, the DTN National Corn
Index was up 28 cents, while the national average corn basis was 11 cents
stronger.
Producer selling remains slow, especially in the areas of the Eastern and
Western Corn Belt where many acres were not planted, and those that were have
not seen good growing conditions. In the July 1 USDA Crop Progress report, Ohio
noted that for the week ended June 30, "some farmers had abandoned hope for
getting all of their corn for grain planted." The condition of the corn that
has been planted was only 31% in the good-to-excellent category, with the
majority of the corn in the fair category.
The other two Corn Belt states that showed sharp reductions in quality
ratings as of June 30 were Indiana and Illinois, where corn basis has surged.
Corn condition in Illinois was 5% very poor, 14% poor, 39% fair, 36% good, and
6% excellent. In Indiana, corn condition was 5% very poor, 16% poor, 40% fair,
35% good, and 4% excellent. In his closing grain comments on July 5, Dana R.
Mantini, DTN Senior Analyst, noted that some areas in Indiana are "paying as
much as +65U for cash corn."
Mantini also noted in his July 3 DTN Before the Bell morning comments that
there was talk from the USDA that prevented planting acres could be over 10
million and claims could be over $1 billion. He said that, "large corn
deliveries against the expiring July futures are being stopped by commercials.
The corn basis in the ECB remains very firm with values of as much as 45
(cents) over for new crop, as end users scramble to secure supplies from a
farmer who has little interest in selling after a 50-cent break from the highs."
Nearly half of that break occurred after the June Planting Intentions report
that sent the market on a downward spiral, when the USDA said that the corn
area planted as of June 1 was estimated at 91.7 million acres, up 3% from last
year. However, USDA said in a podcast the same day that, "because of extensive
planting delays, USDA will re-survey farmers in 14 states about their
plantings." Those updated numbers will be published in the USDA Crop Production
report scheduled for Monday, Aug. 12.
As for prevented planting acres, we should see our first real look in the
mid-August Farm Service Agency (FSA) report when the first Crop Acreage Data
reports for 2019 will commence to include their "prevented acres" report and
also "planted acres (including failed acres)," according to the FSA website.
These monthly reports detailing certified acreage from reports from local FSA
offices will continue to be updated each month through the end of the year.
Since farmers entering the prevented planting program obviously need to do so
with their county agents, the FSA reports will be an important source to get a
better handle on prevented planting acres and possibly even planted acres.
In the meantime, until this market has a handle on acreage and farmers keep
watch on their crop conditions in the areas that are struggling and hoping for
improvement, expect the fireworks normally reserved for the Fourth of July to
continue for the corn basis.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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Trucking Hours of Service Reform Still Up in the Air
On June 4, the House Appropriations Committee said in a news release that
they approved the fiscal year 2020 Transportation, Housing and Urban
Development (THUD), and related agencies bill on a vote of 29 to 21. The
legislation funds the Department of Transportation, the Department of Housing
and Urban Development, and other related agencies, including the United States
Interagency Council on Homelessness.
Read the news release here:
https://appropriations.house.gov/news/press-releases/appropriations-committee-ap
proves-fiscal-year-2020-transportation-housing-and
The bill, which prevents the Department of Transportation (DOT) from
eliminating the 30-minute break requirement from current hours of service
regulations, includes a provision that "prohibits future attacks on state meal
and rest break laws" as it relates to the U.S. Department of Transportation's
(DOT) Federal Motor Carrier Safety Administration (FMCSA) contentious Hours of
Service (HOS) rule.
Heavy Duty Trucking (HDT), media services for trucking and its allied
industries, noted on its website on the same day the bill passed that, "The
committee apparently didn't like the FMCSA's move late last year to announce
that federal hours of service rules pre-empt state meal and rest break rules
(most notably California's)." Right before Christmas 2018, the agency had
granted petitions to preempt California's meal and rest break rules for truck
drivers because they conflicted with current federal hours-of-service
regulations. Even as the FMCSA was close to proposing new revisions to the
hours of service rules, the THUD bill aims to stop the agency from dropping the
30-minute rest break provision, according to HDT.
"However, those provisions still face an uphill climb in becoming law,"
noted Overdrive, a magazine for leased owner-operators and independent
owner-operators. "The policy riders must still clear the Senate, which has yet
to unveil any appropriations bills, and be signed by President Trump. Likely,
the Senate spending bills will differ from the House's versions, setting up a
conference committee to work out the differences. In that scenario, the
trucking riders would need to survive that process and then be passed again by
both chambers, then signed by President Trump."
EXEMPTION FOR HOS REMAINS FOR LIVESTOCK AND INSECT HAULERS FOR NOW
In December 2018, the FMCSA announced a statutory exemption from electronic
logging devices (ELDs) for transporters of livestock and insects to remain in
place until further notice. The exemption was originally due to expire at the
end of the government's fiscal year, September 30, 2018. Congress finally
extended it again through December 21, 2018, and it was set to expire on June
26, 2019. The term "livestock" includes cattle, elk, reindeer, bison, horses,
deer, sheep, goats, swine, poultry, fish used for food and other animals that
are part of a foundation herd.
The use of an ELD intertwines with the HOS rule, because it requires all
commercial drivers who prepare HOS records to connect an ELD to a vehicle's
engine to record driving hours. Once the time expires, the ELD doesn't shut the
truck down, but it alerts the driver that they are violating the rule if they
continue to drive.
This can be problematic for drivers who are carrying live animals (and even
perishable commodities) and may be close to their final destination or have
been delayed in traffic along their route. Because of the electronic
monitoring, they are forced to park the truck or risk fines (or other
penalties) if they continue to drive because the ELD records them going past
their allotted hours.
On May 1, U.S. Senator for Nebraska, Ben Sasse reintroduced the Transporting
Livestock Across America Safely Act, with Sasse leading a bipartisan group of
senators in introducing the legislation.
In a press release, Sass said that, "Agriculture drives Nebraska, and nobody
works harder to ensure the safety and well-being of livestock than the
Nebraskans who hustle day in and day out. Overly strict regulations are hurting
our ranchers and our haulers. My legislation pushes back against those dumb
regulations and works to promote safe transportation. This is good, reasonable,
common sense, bipartisan legislation and it should pass so we can give
Nebraskans the flexibility they need to keep livestock safe and to keep our
state running and feeding the world."
The Transporting Livestock Across America Safely (TLAAS) Act addresses these
problems and eases the burden of these far-reaching HOS and ELD regulations for
haulers of livestock or insects.
The inflexibility of these regulations will be costly for haulers (who have
a proven safety record) and place the well-being and welfare of cattle, hogs
and other livestock at risk, noted the press release. Current law does not
allow flexibility for livestock and insects to reach their destination given
the vast geography of production and processing facilities, most often spanning
from coastal states to the Midwest.
Extended stops for a hauler, which would be necessitated by the HOS
regulations, are especially dangerous for livestock during summer or winter
months; high humidity and winter temperatures with below freezing wind chills
cause significant stress on livestock.
The current HOS rules are posted here:
https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regula
tions
Specifically, the Sasse legislation provides that HOS and ELD requirements
are inapplicable until after a driver travels more than 300-air miles from
their source. Drive time for HOS purposes does not start until after 300-air
mile threshold.
In addition, it exempts loading and unloading times from the HOS calculation
of driving time, extends the HOS on-duty time maximum hour requirement from 11
hours to a minimum of 15 hours and a maximum of 18 hours and grants flexibility
for drivers to rest at any point during their trip without counting against HOS
time.
The legislation also allows drivers to complete their trip, regardless of
HOS requirements, if they come within 150-air miles of their delivery point. It
also ensures that, after the driver completes their delivery and the truck is
unloaded, the driver will take a break for a period that is five hours less
than the maximum on-duty time (10 hours if a 15-hour drive time).
The Nebraska Farm Bureau, Nebraska Cattlemen, National Cattlemen's Beef
Association, U.S. Cattlemen's Association and the Livestock Marketing
Association support the legislation.
The House bill that passed June 4 also included a continuation of the ELD
waiver granted to livestock and insect haulers. Under the bill, such drivers
can continue to run on paper logs through September 2020.
SAFETY ADVOCATES RESIST CHANGES TO HOS
Considerations for changes to the current HOS rule surround the safety of
the drivers who share the roads with semis and whether extending hours for
truckers can be a safety hazard. In the end, it could be a difficult balance to
achieve.
The FMCSA noted on their website that in the Large Truck and Bus Crash study
for 2017 (updated May 2019), 4,889 large trucks and buses were involved in
fatal crashes, a 9% increase from 2016. Although the number of large trucks and
buses in fatal crashes has increased by 42% from its low of 3,432 in 2009, the
2017 number is still 7% lower than the 21st century peak of 5,231 in 2005. From
2016 to 2017, large truck and bus fatalities per 100 million vehicle miles
traveled by all motor vehicles increased by 6.8%, from 0.146 to 0.156.
Past studies have suggested that fatigue and/or sleep deprivation may be a
contributing factor in at least 30% to 40% of heavy truck crashes. In the study
on the FMCSA website, it was noted that "Distraction/Inattention" was the
second most common for large truck drivers. The study said that there were 841
large truck occupant fatalities in 2017, a 16% increase from the 725 fatalities
in 2016. In 2017, 85% of these occupant fatalities were drivers of large
trucks, and 15% were passengers in large trucks.
Here is a link to the entire study:
https://www.fmcsa.dot.gov/safety/data-and-statistics/large-truck-and-bus-crash-f
acts-2017
It is understandable that trucks hauling live cargos need some kind of
reform to the HOS, like the ones mentioned in the Sasse TLAAS Act. However, the
bottom line in all of this is that there needs to be a solution that protects
the safety of not just live cargo being transported, but primarily, the safety
of all drivers; regardless of what vehicle they are driving on the roads.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DTN Weekly DDG Average Price Steady
OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price
from the 40 locations DTN contacted was unchanged at $141 per ton for the week
ended June 27. DDG prices overall were steady as cash corn prices were flat and
soymeal prices were lower this week. California DDG prices were lower across
the board.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended June 27 was at 89.73% and is still below the
five-year average. The value of DDG relative to soybean meal was at 45.16%. The
cost per unit of protein for DDG was $5.22, compared to the cost per unit of
protein for soybean meal at $6.57.
The midweek Energy Information Administration report noted that plant
production declined for the second consecutive week and ethanol inventory moved
fractionally lower to 21.567 million barrels during the week ended June 21,
placing it at the lowest since the week ended May 25, 2018.
In their weekly export DDGS update, the U.S. Grains Council stated, "On the
export market, merchandisers report modest buying interest from Southeast Asia
with several confirmed sales. FOB Gulf DDGS values are near $221/mt this week
with 40-foot containers CIF Southeast Asia values rising $6/mt for spot
delivery to $244/mt. Merchandisers note mostly quiet interest from Vietnam but
a recent uptick in inquiries for July and August delivery. Buyers in Indonesia
have also made several inquiries for July/August shipment."
NOTE: The prices listed below are through the week ended June 27. Because of
the Independence Holiday next week, there will be no price update. These prices
may change between now and the next update in two weeks, so call the buyer to
check on current prices after this week.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
6/20/
COMPANY STATE 6/27/2019 2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $155 $150 $5
Wet $80 $80 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $150 $145 $5
Wet $77 $75 $2
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $150 $0
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Michigan Dry $145 $145 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $155 $155 $0
South Dakota Dry $135 $135 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $138 $2
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $170 $160 $10
Iowa Dry $135 $145 -$10
Michigan Dry $140 $150 -$10
Minnesota Dry $140 $145 -$5
Missouri Dry $165 $165 $0
Ohio Dry $170 $165 $5
South Dakota Dry $150 $145 $5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $120 $120 $0
Wet $45 $45 $0
Illinois Dry $148 $140 $8
Nebraska Dry $120 $120 $0
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $130 $130 $0
New York Dry $150 $150 $0
North Dakota Dry $140 $140 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $135 $135 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
California Dry $200 $202 -$2
Western Milling, Goshen, California (559-302-1074)
California Dry $214 $220 -$6
*Prices listed per ton.
Weekly Average $141 $141 $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 6/27/2019 $4.4000 $157.14
Soybean Meal 6/27/2019 $312.20
DDG Weekly Average Spot Price $141.00
DDG Value Relative to: 6/27 6/20
Corn 89.73% 87.73%
Soybean Meal 45.16% 43.65%
Cost Per Unit of Protein:
DDG $5.22 $5.22
Soybean Meal $6.57 $6.80
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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2019 Spring Wheat Acres Down: What Did Get Planted Went in Late
Two months ago, I wrote a story titled "Lack of 2019 Spring Wheat Planting:
Time to Push the Panic Button Yet?"
Click this link to read it:
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
9/04/08/lack-2019-spring-wheat-planting-time
I told farmers and elevator managers who contributed to that story, and a
few others, that I would check back with them in May. That didn't happen,
because the rain continued and late spring snow halted planting in some areas.
I reached out to them to see how planting went and if all of the intended
spring wheat acres were put in, and if not, what they planted instead, or were
some acres idled?
"Well, it has been a busy spring," said Tim Dufault, Crookston, Minnesota.
"Some wheat seeding started in the far north area of North Dakota and Minnesota
in late April. But things did not really get going hard until May. Therefore,
spring wheat and sugar beets were two to three weeks late in seeding. We have
had some heat. Overall, it has been a cool spring so far. This has been great
for the wheat -- no stress."
Dufault said that corn was next to go in the ground. "Acres were down a
little from last year in the region. Cash prices dropping below $3 in April
convinced growers to plant something else. Corn planting was a little later
than farmers would like, but not outside a normal Northern Plains planting
window. Most soybeans actually were seeded on time in northwestern Minnesota.
Southeast North Dakota was wetter, and most of their beans were finished up in
June. After the late planting, soybeans and corn are going to need heat units
to catch up."
Dufault noted that the soil moisture situation really varies. "Southeast
North Dakota has some acres too wet and probably won't get planted this year
with unharvested cornfields still an issue. Northeast North Dakota has been
drier all spring and really could use a good soaker. We came into the spring
with good moisture in northwest Minnesota and have had just enough rain to keep
things growing."
Dufault added, "I think everything in northwest Minnesota and northeast
North Dakota will be planted. But I know of growers in southeast North Dakota
who will have to leave large parts of their farms unplanted."
Jeff Mortenson of Kennedy, Minnesota, told me that he planted hard red
spring wheat, canola and soybeans. "We were fortunate up here and got
everything planted and finished the night of May 21. It started to rain some
the next day. I don't think there is much, if any prevented planting up here.
Even on the flood ground. We got a needed rain a week or two ago."
Mortenson said it would be nice to have some higher temperatures and timely
rains to keep things growing. "Compared to a majority of the United States, we
are lucky for once for how our spring went, even though it didn't look that way
when it started with the flooding and cold temps."
Keith Brandt, general manager of Plains Grain and Agronomy LLC in Enderlin,
North Dakota, said spring wheat acres are down 10% to 12% from what farmers had
intended to plant. "There is a big range in planting dates of April 23 to June
11. Because of the cool and damp conditions, wheat planted by mid-May looks
very good and has decent potential. The balance will be 10 to 15
bushels-per-acre less on yield."
Brandt said corn planting is finished in his area. "About 10% of the corn
acres were prevented planting. Most of the corn looks good if it went in May
31, but we will have to wait and see how much is pollinated by Aug. 1. Soybean
planting is 98% done and acres only down slightly. Top-soil moisture is good
and sub-soil moisture is surplus."
"Feeling pretty fortunate compared to northern North Dakota where they are
dry and squeaking by," said Mark Rohrich, Rohrich Farms, Ashley, North Dakota.
"South of us, there are a lot of places with just rain and more rain. We got a
whole lot of crop in and when guys were thinking about patching in some areas,
rain comes back around."
I asked Rohrich how his spring wheat was doing and he said it was "decent,"
but some got in late. "Driving rain made soil like concrete. Could be a better
stand; the late after rain stuff in the area has nice stands, but that was
seeded end of May, early June. Mine was all in earlier. We are lucky to get as
far as we have."
Allan Klain of Turtle Lake, North Dakota, told me "seeding went really well.
We started on wheat April 18 and finished May 8. We had good moisture and
little shots of moisture have the crop looking good. We are not overly flush
with moisture and could use some. Rain is in the forecast and we welcome it."
Klain said that, "Corn had a hard time getting out of the ground due to cold
soil and there is a fair amount of cold inhibition stand loss in corn. All in
all, we had a pretty easy planting season. There were minor fertilizer supply
issues during the first part of May, but we got through it."
"The planting season turned out okay for those in our area, although to the
east was somewhat of a disaster," said Tregg Cronin of Gettysburg, South
Dakota. "On our farm, we were able to seed most of intentions with about 20% of
our corn area ending up as prevent plant. Our soybean and sunflower acres were
all able to be seeded, however."
Cronin said emerged crops look good after rain moved through his area during
the last week. "Maturity is the concern with everything about two to three
weeks behind, but we feel pretty good about prospects so far.
"Our winter wheat is going through flowering right now with strong prospects
expected. Our spring wheat should be heading out in about 10 to 14 days and
prospects there look solid. We are expecting above average yields on both
spring and winter wheat. A long fall will be needed for our row crops to reach
full maturity, but it is a long way off to be worrying about frosts or wet
crops that won't dry down," concluded Cronin.
Matthew Morog, merchandising manager at CHS Midwest Cooperative in
west-central South Dakota said, "I don't think we planted the intended spring
wheat acres, but definitely not at the low end of the estimates. The wheat crop
overall in the Onida-Pierre area looks very good, but honestly it could use a
little shot of rain if we want to get those high-end yield estimates. Guys have
been able to do a fair amount of fieldwork to keep wheat in condition, but
there are areas that have been too wet to simply keep weeds down. Harvest will
be about two weeks later than the norm for both spring and winter wheat."
"We maybe had 15% of the intended spring wheat acres planted in our area,"
said Todd Yeaton, shuttle facility manager in Kimball, South Dakota. "For corn,
likely 60% of intended acres have been planted and 70% of soybean intended
acres. The rest will be prevent plant on mainly last year corn ground and
no-till farmers due to the stalks still terribly wet. Crops that were planted
could use rain, as ground is hard."
Ryan Wagner, Roslyn, South Dakota said, "Compared to some of the disaster
stories I am hearing out there, we got very lucky this spring. We started
seeding spring wheat April 24 and were able to work off and on between rain
events and finished up on May 10, getting 95% of our intended spring wheat
acres in."
Wagner said they were able to start planting corn on May 4 and got a few
days in before they got rained out. "We then had a nice open window May 10
through May 17 when we were able to get the majority of the rest of the corn
done. Rain then kept us out of the field for a good two weeks, and we were
finally able to finish up the last whole field of corn on May 30 and continued
to patch in wet spots until June 3.
"We were able to get some soybeans planted before the rains came in late
May, but the majority of our soybeans were planted the first week of June. We
wrapped up soybean planting for the most part on June 8 and finished completely
filling in wet spots on June 13. It has also been a struggle to find days
suitable for spraying, but we did manage to get a burndown and pre-emergent on
everything and have sprayed the first pass post-emergent in wheat and are now
working on spraying corn, so we are basically caught up there."
Tim Luken, manager at Oahe Grain, Onida, South Dakota, reminded me that two
years ago they had a severe drought in his area, last year they had two serious
hail events, and this year have had the wettest spring ever and there is still
water standing around.
Luken said that in the area around him he estimated 70% of the spring wheat
did get in but it will be late. "Normally, spring wheat is jointing by now, and
that is at least a good week to 10 days off. Winter wheat is just starting to
head out, which is two weeks later than normal. Needless to say, rather than
harvest starting normal around July 10, it will likely be the end of July and
that is the latest I have ever seen around here.
"Corn was being planted up to June 10 around here and then farmers gave up
the ghost and starting either planting beans or sunflowers." Luken said that in
his area, he expects to see 10% to 12% of acres getting enrolled in prevented
planting.
"Last year, corn was waist high by July 4 and this year we hope it's ankle
high by the Fourth of July," said Luken. "It will be interesting if Mother
Nature gives us some well needed time on the back end for the row crops. If it
doesn't, it could make for a very interesting fall."
So, what is next for the spring wheat and other crops, especially the ones
that were planted late? Bryce Anderson, DTN Senior Ag Meterologist, wrote a
weather blog on June 21, noting that, "Scientists with the National Oceanic and
Atmospheric Administration (NOAA) and the USDA Midwest Climate Hub are worried
about how summer 2019 conditions will treat crops that are already behind the
development time curve because of wet and cool weather.
Here is a link to the entire blog:
https://www.dtnpf.com/agriculture/web/ag/news/article/2019/06/21/climatologists-
worry-time-run-2019
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DTN Weekly DDG Average Price Higher
OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price
from the 40 locations DTN contacted was $4 higher this week versus the prior
week, at $141 per ton for the week ended June 20. Prices overall were steady to
higher, as the cash price of corn continues higher. The DTN National Corn Index
gained 11 cents versus one week ago.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended June 20 was at 87.73% and, while higher this week
versus last, it is still below the five-year average. The value of DDG relative
to soybean meal was at 43.65%. The cost per unit of protein for DDG was $5.22,
compared to the cost per unit of protein for soybean meal at $6.80.
The EIA reported for the week ended June 14, ethanol supply in the U.S. was
drawn down for the fourth consecutive week, falling 200,000 bbl to a one-year
low at 21.6 million bbl.
Weekly ethanol production was down, week over week, by 1.4% and up by 1.6%
year over year.
In its weekly update, the U.S. Grains Council noted DDGS indications were
higher again this week. "Market stakeholders report a mostly quiet market this
week. DDGS indications for FOB vessel Gulf are down slightly from last week,
while July delivery is becoming harder to find. Indications for 40-foot
containers to Southeast Asia recovered from last week's drop, increasing $3/mt
on average. Merchandisers report continued interest from Indonesia and Vietnam,
and new sales to South Korea (August delivery), new sales to Indonesia and
continued strong interest from buyers in Vietnam."
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 6/20/2019 6/13/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $150 $145 $5
Wet $80 $75 $5
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $145 $145 $0
Wet $75 $75 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $150 $0
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Michigan Dry $145 $145 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $155 $155 $0
South Dakota Dry $135 $135 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $138 $135 $3
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $160 $140 $20
Iowa Dry $145 $135 $10
Michigan Dry $150 $130 $20
Minnesota Dry $145 $135 $10
Missouri Dry $165 $140 $25
Ohio Dry $165 $150 $15
South Dakota Dry $145 $145 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $120 $120 $0
Wet $45 $45 $0
Illinois Dry $140 $140 $0
Nebraska Dry $120 $120 $0
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $130 $130 $0
New York Dry $150 $150 $0
North Dakota Dry $140 $140 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
Wisconsin Dry $135 $130 $5
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $140 $140 $0
Iowa Dry $135 $125 $10
Minnesota Dry $135 $125 $10
Nebraska Dry $135 $135 $0
Ohio Dry $150 $150 $0
South Dakota Dry $130 $130 $0
California Dry $202 $205 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $220 $215 $5
*Prices listed per ton.
Weekly Average $141 $137 $4
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 6/20/2019 $4.5000 $160.71
Soybean Meal 6/20/2019 $323.00
DDG Weekly Average Spot Price $141.00
DDG Value Relative to: 6/20 6/13
Corn 87.73% 86.79%
Soybean Meal 43.65% 42.59%
Cost Per Unit of Protein:
DDG $5.22 $5.07
Soybean Meal $6.80 $6.77
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
******************************************************************************
Flooding Keeps Chokehold on Barge Traffic, Stalling Grain Shipments
The long, record-breaking flooding of 2019 on the Mississippi River system
has taken a toll on farmland, personal property and the many cities and towns
that line the rivers. It has also disrupted commerce on the rivers that depends
on barges to move product, especially fertilizer, grain and oilseeds, to and
from the Gulf of Mexico and other points along the way.
Only 12 barges have made it to St. Paul, Minnesota, the northernmost point
on the Upper Mississippi River, so far this shipping season. The Motor Vessel
Aaron F. Barrett, pushing 12 barges heading to St. Paul, Minnesota, locked
through Lock and Dam 2 near Hastings on April 24. Since then, flooding and
ensuing lock closures have kept most of the entire Upper Mississippi River
closed. Most recently, the closure of the St. Louis Harbor shut down barges
from moving up or downriver through there.
Upper Mississippi River Locks 11 through 27 from the Illinois-Wisconsin
boarder to St. Louis have been closed on and off over the past three months due
to flooding conditions. As of June 16, the United States Army Corps of
Engineers (USACE) reported Lock and Dam 24, Lock and Dam 25, Mel Price Locks
and Dam, Locks 27 and Costello Lock and Dam were still closed. Projected
opening dates run from June 16 to as late as June 23.
Here is a link to the USACE St. Louis District reporting lock closures and
other flood information: https://www.mvs.usace.army.mil/Home/Flood-Fight/.
The St. Louis Harbor is closed until the river level recedes below 38 feet,
which is not expected to occur until June 20, according to current forecasts.
Mississippi River levels at St. Louis crested for the second time this year at
45.7 feet on June 10, 3.9 feet lower than the record level of 49.6 feet set on
Aug. 1, 1993. On Sunday, June 16, the river stage was at 42.7 feet.
Here is a link to the National Weather Service hydrograph for current and
future river stage forecasts at St. Louis:
https://water.weather.gov/ahps2/hydrograph.php?wfo=lsx&gage=eadm7.
The Lower Mississippi River remains open below St. Louis, but barge traffic
continues to be disrupted by reduced tow sizes and transit time due to
restrictions of daylight-only hours under some bridges between St. Louis and
the Gulf. Barges are also subject to no-wake zones that also slow their transit
time to the Gulf.
"The system and everything within are stressed and upside down," said Tom
Russell, Russell Marine Group. "Barge logistics are totally out of balance.
Empty barge availability in New Orleans is limited and costly, and ships are
backing up in New Orleans waiting for cargo deliveries. Roads and bridges in
flooded areas limit rail and truck movements."
In the Southwest Pass (SWP), there is congestion due to safety protocols and
high water. These protocols include daylight-only docking/undocking at
midstream terminals when water levels are above 12 feet and extra tug power
remains in barge fleets at all times, said Russell. "At 16 feet and above, all
vessel movement will be daylight only from mile marker 233 through 90.5.
Vessels anchoring in that area with a draft of 35 feet or greater will maintain
a pilot on board while at anchor." Other safety protocols are also in place
when New Orleans experiences heavy fog.
"Midweek, there were 15 to 20 ships in queue waiting entry," said Russell.
"There are five dredges working in the SWP to maintain draft. Due to heavy
flows and strong current, shoaling and sandbars are a major issue." The
Southwest Pass is one of the channels at the mouth of the Mississippi River
that empties into the Gulf of Mexico at the southwestern most tip of the
Mississippi River.
Shoaling and sandbars will be problematic throughout the entire river system
where flooding has been ongoing. In the St. Paul district, dredging continues
because of shoaling and is expected to continue most of the 2019 shipping
season, according to the USACE St. Paul. This may add to slowdown in traffic
once barges are able to move through the river system again. The USACE St. Paul
District reported on June 14 that there are currently three active
channel-dredging operations in the Mississippi River, and two contract
mechanical-dredge crews are mobilizing to begin the week of June 17.
BASIS, BARGE FREIGHT HIGHER; LOADED BARGES REMAIN STUCK ABOVE ST. LOUIS
According to USDA's weekly Grain Transportation Report, flooding continues
to reduce the amount of barged grain on the Mississippi River and its
tributaries. "So far this year, 13,194 barges of grain have been unloaded at
ports on the lower Mississippi River. This is 15% fewer than last year, and 13%
below the three-year average. Year-to-date tonnages of down-bound grain, at
locking portions of the Mississippi, Ohio and Arkansas Rivers, were 10 million
tons, 29% lower than last year and 35% lower than the three-year average."
Corn and soybean deliveries to New Orleans are near six-year lows, according
to USDA, as hundreds of barges full of corn and soybeans have been kept waiting
up river until water recedes. American Commercial Barge Line reported in their
daily newsletter on June 14 that they currently have 629 barges destined to
areas affected by adverse river conditions.
As of June 15, the Mississippi River at New Orleans was holding steady at
16.6 feet, and current predictions show that it will not drop below 16 feet
until late July. "The river stage in New Orleans is now in the longest
sustained flood stage level on record," added Russell. That record could likely
continue as weekend forecasts called for scattered showers in the Gulf area.
Here is a link to the National Weather Service hydrograph for current and
future river stage forecasts at New Orleans:
https://water.weather.gov/ahps2/hydrograph.php?wfo=lix&gage=norl1.
Cash basis for corn and soybeans on the Upper Mississippi River have
strengthened for July and August delivery in anticipation of the river being
nearly back to normal, allowing terminals to load out barges to move up and
down river through St. Louis once again. Barge freight in that same area is
high for the first two weeks of July and stays strong through the month, as
there will be a big demand for empties. Basis has also been stronger in the
Lower Mississippi River area as buyers need to get corn and soybeans to the
Gulf for waiting ships.
"Sooner or later, flood waters will recede," said Russell. "However, the
consequences and repercussions will be felt for some time before returning to
normal."
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DTN Weekly DDG Average Price Strengthens
OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price
from the 40 locations DTN contacted was $4 higher this week versus the prior
week, at $137 per ton for the week ended June 13. DDG prices in the Eastern
Corn Belt are more firm compared to other areas and, while Upper Midwest values
are mixed, that may change once the Upper Mississippi River opens.
While water is receding there, the river remains closed farther south where
there are still seven locks closed. The biggest closure remains at St. Louis
where water levels are at 43.7 feet as of midday June 14 and need to go below
38 feet, which may not happen until June 19.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended June 13 was at 86.79% and is below the five-year
average. The value of DDG relative to soybean meal was at 42.59%. The cost per
unit of protein for DDG was $5.07, compared to the cost per unit of protein for
soybean meal at $6.77.
Ethanol supply in the United States moved sharply lower during the first
week of June, falling to 11-month lows according to the recent Energy
Information Administration report. EIA reported ethanol plant production gained
52,000 bpd or 5% to 1.096 million bpd, reversing up from a four-week low.
In its weekly update, the U.S. Grains Council noted DDGS indications were
higher again this week. "DDGS indications for FOB vessel Gulf are higher this
week at $222/mt for July delivery. Indications for 40-foot containers to
Southeast Asia decreased $3/mt, on average, Merchandisers report new sales to
Indonesia and continued strong interest from buyers in Vietnam."
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 6/13/2019 6/6/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $145 $142 $3
Wet $75 $74 $1
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $145 $135 $10
Wet $75 $65 $10
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $145 $5
Indiana Dry $145 $140 $5
Iowa Dry $135 $130 $5
Michigan Dry $145 $145 $0
Minnesota Dry $135 $125 $10
North Dakota Dry $135 $130 $5
New York Dry $155 $155 $0
South Dakota Dry $135 $115 $20
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $135 $135 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $130 $130 $0
Minnesota Dry $135 $135 $0
Missouri Dry $140 $140 $0
Ohio Dry $150 $150 $0
South Dakota Dry $145 $145 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $120 $120 $0
Wet $45 $45 $0
Illinois Dry $140 $135 $5
Nebraska Dry $120 $120 $0
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $130 $10
Indiana Dry $140 $135 $5
Iowa Dry $135 $130 $5
Michigan Dry $135 $130 $5
Minnesota Dry $130 $125 $5
Nebraska Dry $130 $125 $5
New York Dry $150 $145 $5
North Dakota Dry $140 $140 $0
Ohio Dry $150 $145 $5
South Dakota Dry $130 $125 $5
Wisconsin Dry $130 $120 $10
Valero Energy Corp, San Antonio Texas (210-345-3362)
Call Indiana Dry $140 $140 $0
Call Iowa Dry $125 $125 $0
Call Minnesota Dry $125 $125 $0
Call Nebraska Dry $135 $135 $0
Call Ohio Dry $150 $150 $0
Call South Dakota Dry $130 $130 $0
Call California Dry $205 $205 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $215 $205 $10
*Prices listed per ton.
Weekly Average $137 $133 $4
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 6/13/2019 $4.4200 $157.86
Soybean Meal 6/13/2019 $321.70
DDG Weekly Average Spot Price $137.00
DDG Value Relative to: 6/13 6/6
Corn 86.79% 88.56%
Soybean Meal 42.59% 42.10%
Cost Per Unit of Protein:
DDG $5.07 $4.93
Soybean Meal $6.77 $6.65
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
******************************************************************************
HRW Wheat Begins New Crop Year
Despite challenging growing conditions in many areas during the 2018
harvest, the 2018 hard red winter (HRW) wheat crop had generally good kernel
characteristics, according to the final U.S. Wheat Associates (USW) harvest
report on Oct. 2, 2018. "Overall, 93% of composite, 91% of Gulf-Tributary and
98% of Pacific Northwest (PNW)-Tributary samples graded U.S. No. 2 or better.
Test weight averages were at 60.9 lb/bu, above the five-year average of 60.3
lb/bu and above the prior year average of 60.5 lb/bu. The average wheat falling
number was 373 seconds, which was comparable to the 2017 and five-year
averages, and indicates sound wheat." (Falling number test is a determination
of sprout damage in the wheat.)
The USW report also noted the average protein in 2018 of 12.4% (12% moisture
basis) was significantly higher than the prior year and equal to the five-year
average. Protein content distribution varied by growing region; the
Gulf-Tributary average was 12.7% and the PNW-Tributary average was 11.7%.
Approximately 12% of the samples tested were less than 11.5% protein, 29%
between 11.5% to 12.5% and 60% were greater than 12.5%.
Here is a link to my 2018 HRW wheat harvest story on Aug. 20, 2018, that
gives a good rundown of how the winter wheat growing areas around the U.S.
fared:
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
8/08/20/2018-hard-red-winter-wheat-harvest .
In USDA's September 28, 2018, Small Grains Summary report, USDA noted winter
wheat yields in Kansas were at 38 bushel per acre (bpa), down from the 2017
yield of 48 bpa. The yield in Oklahoma was at 28 bpa versus 34 bpa in 2017.
Lower planted acres and drought conditions in Kansas, Oklahoma and many of the
other key winter wheat states caused the lower yields in 2018.
On Dec. 6, 2018, Kansas Wheat reported acres in Kansas would likely be lower
than the prior year, possibly reaching new 100-year lows in the state. The 7.7
million planted acres in fall 2017 were the third lowest in a century.
"Abnormal weather patterns in October and November contributed to the
decrease in acres planted. According to the Kansas Mesonet, there was record
precipitation throughout the state in October and below average temperatures in
November," said Kansas Wheat. "The wet fall led to the state being essentially
drought-free for the first time in years, but it also kept farmers out of the
fields during fall harvest and wheat drilling time."
In the Feb. 8, 2019, Winter Wheat Seedings report, USDA estimated that HRW
wheat seeded area was expected to total 22.2 million acres, down 3% from
seedings in 2018. Planted acreage was down versus the prior year across most of
the growing region, with the largest declines in planted acreage estimated in
California, Kansas and Oklahoma. Record low acreage was seeded in Nebraska,
noted USDA.
WHAT LIES AHEAD FOR HRW WHEAT FLAT PRICE?
I asked Dan Maltby, a former HRW wheat buyer in Kansas City (KC) and
currently a consultant for Risk Management Group in Minneapolis, for his price
insight on last crop year and the year ahead.
"The past year was not a good one for U.S. HRW wheat producers unless they
sold everything the first week of August 2018. Prices steadily eroded about
$1.50 over the next 10 months," said Maltby. "This year, unfortunately, we
might have already had the one marketing opportunity; although I don't yet
think it's dead because there are three opportunities remaining that could
help."
Maltby said the first one involves corn planted acres and yield versus
demand destruction. "This will take a while to play out and, unfortunately, may
very well have done its thing IF corn acres were to yield 171 bpa," he said.
Given the late planting, we are all well aware that this is anybody's guess at
this point.
"Second would be if spring wheat country stays dry; if so, expect the rally
to be quick, and ultimately, probably fade," added Maltby.
Maltby said the third opportunity would be a Russian drought. "If that
happens, then KC wheat will go much higher and stay up there much longer. The
problem is that it is difficult to get reliable information from over there."
There is Australia, which is still dry and will probably stay dry, said
Maltby. "But, Australian droughts don't seem to have the same rally power for
KC wheat as Russia, Canada or this year, corn."
Summing up his three opportunities, Malby said, "Both No. 2 and No. 3 are
great until it rains, and then, no prisoners are taken on the way down."
OLD-CROP BASIS STRENGTHENS OVER QUALITY CONCERNS IN NEW CROP
Given the relentless rains and storms in the Southern Plains over the past
month, it is likely the new-crop wheat will face some quality issues and lower
protein than last year's crop. The KC spot market basis is already showing
strength for milling quality old-crop HRW wheat, as mills are concerned about
the potential for weather related problems in the new crop, especially in
Oklahoma and Kansas.
The DTN national average cash basis for the 2018-19 crop year ended above
the maximum five-year average, much the same as the 2017-18 crop year. So far,
early in the new-crop year of 2019-20, the DTN national average basis remains
above the five-year average as well. This will likely remain the pattern given
the potential quality issues.
In their June 10, 2019, weekly harvest report, USW said rainstorms continue
to hit the Great Plains and Midwest, significantly slowing harvest. "Harvest is
22% complete in Texas and 1% in Oklahoma. In Kansas, there are increasing
concerns about yield loss and impact from water; harvest is not expected to
begin for another one to two weeks."
USW noted conditions have improved in Colorado and USDA estimates 80% of the
crop there is in good-to-excellent condition. "HRW wheat conditions are also
good in the Northern Plains and in Washington state. Harvest is still one or
more weeks behind normal throughout the HRW wheat growing region as warmer
weather is needed."
The bottom line is that until all U.S. new-crop bushels are harvested,
graded and in the bin, nobody can determine with 100% certainty what the
new-crop quality is as it stands in the field. Given the current weather
forecast, it could be a while before we get a good handle on new-crop quality
because it may continue to deteriorate as it waits to be harvested.
According to the DTN forecast for the week ahead, DTN Senior Ag
Meteorologist Mike Palmerino noted scattered light to moderate showers and
thunderstorms with locally heavier in central Kansas. In northwest Kansas,
northeast Colorado and southwest Nebraska, scattered to light showers are
forecast. Dry conditions or just a few light showers are expected elsewhere.
"Near to above normal rainfall in the Southern Plains increases disease
pressure on maturing wheat, lowers crop quality and disrupts the early
harvest," added Palmerino.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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