DTN Corn News

FARM MARKET NEWS - CORN REPORT FOR Tue, January 28 Exchange rate was 1.3169 down 0.0012 Chicago corn closed slightly to moderately higher. MAR20 HI 3.87 DEC20 HI 3.97 3/4 LOW 3.78 1/2 LOW 3.93 3/4 CLOSE3.86 1/2 Up 6 CLOSE 3.97 1/2 Up 2 1/4 OLD CROP BASIS NEW CROP BASIS Location Spot 1mt 2mt 3mt U.S. $/bu $/mt Cntrct U.S. $/bu $/mt ELEVATORS +MAR20+MAY20+MAY20 CK Low 1.30 5.17 203.34 0.85 4.83 189.95 CK High 1.35 5.22 205.31 0.95 4.93 193.89 CK Avg 1.33 0.08 5.20 204.65 0.88 -0.29 4.85 190.94 Essex Cty 1.35 5.22 205.31 0.85 4.83 189.95 Mdsx Low 1.30 5.17 203.34 0.85 4.83 189.95 Mdsx High 1.35 5.22 205.31 0.85 4.83 189.95 Mdsx Avg 1.33 0.08 5.19 204.32 0.85 -0.31 4.83 189.95 Hensall 1.35 5.22 205.31 0.88 4.85 190.94 Bruce 1.35 5.22 205.31 0.85 4.83 189.95 Putnam 1.30 5.17 203.34 0.85 4.83 189.95 Burford 1.35 5.22 205.31 0.85 4.83 189.95 Port Perry 1.35 5.22 205.31 0.95 4.93 193.89 Norfolk 1.35 5.22 205.31 0.85 4.83 189.95 Palmerston 1.36 5.23 205.70 0.93 4.91 193.10 Varna 1.35 5.22 205.31 0.85 4.83 189.95 Trenton 1.45 5.32 209.24 1.00 4.98 195.86 Winchester 1.40 5.27 207.27 1.30 5.28 207.67 North Gower 1.43 5.30 208.45 1.35 5.33 209.64 Huron FOB 1.55 5.42 213.18 0.87 4.85 190.74 Kent FOB 1.53 5.40 212.39 0.85 4.83 189.95 Lamb FOB 1.55 5.42 213.18 1.00 4.98 195.86 Mdsx FOB 1.45 1.50N/A N/A 5.32 209.24 0.90 4.88 191.92 FOB SW Que 2.33 6.20 243.89N/A Track 1.78 5.64 222.04N/A PROCESSORS Chat-Eth N/A N/A N/A N/A 1.03 5.01 197.04 Jhnstwn-Eth N/A N/A N/A 1.87 1.36 5.34 210.03 Aylmer-Eth N/A 1.60N/A N/A 1.05 5.03 197.83 Sarn-Eth 1.60 1.60N/A N/A 5.47 215.15N/A London-Ing N/A N/A N/A N/A 1.30 5.28 207.67 Pt.Colb-Ing N/A N/A N/A N/A N/A Cardnl-Ing N/A 1.90 1.90 1.95 1.40 5.38 211.60 W O Feed 1.91 5.78 227.35 US Rep 2.21 6.08 239.16 Toledo El. 0.30 4.17 164.08 -0.26 3.71 146.12 TRANSFER Pt. Colb 1.60 5.47 215.15 1.15 5.13 201.76 Prescott 1.85 5.72 224.99 1.40 5.38211 3/5 MID SD CRN 1.32 1/2 5.19 HI SD CRN 1.35 5.21 1/2 *Wet Bid

DTN Closing Grain Comments 01/28 14:03 Corn Rebounds as Virus Fears Moderate A fourth day of corn export sales announced and an easing of coronavirus concerns helped March corn close up 6 cents Tuesday. March soybeans were down 2 1/4 cents and all three wheats were modestly lower, but other commodities were mostly higher.

DTN Midday Grain Comments 01/28 10:53 Grains Mixed at Midday The U.S. stock market is firmer with the Dow up 220. The dollar index is 15 points higher. Interest rate products are firmer. Energies are firmer with crude up $0.40. Livestock trade is mostly higher. Precious metals are weaker with gold 8.30 lower. By David Fiala DTN Contributing Analyst General Comments CORN Corn trade is 4 to 5 cents higher at midday with short-covering and fresh export sales adding support to the market. Ethanol margins remain range bound with the energy complex finding some footing for stability and ethanol futures edging slightly higher. U.S. weather should be better in the short term. Basis should remain sideways. The daily wire has been more active the past few days with the trade looking for further confirmations. On the March contract, support is the lower Bollinger band at $3.79 and then recent lows at $3.77. Resistance is the top of the fresh gap at $3.84, which we have filled at midday, with the 20-day at $3.87 above that. SOYBEANS Soybeans trade is 2 to 3 cents lower. The trade is working to test the lower end of the range again this morning with support holding so far. Meal is flat to $1.00 lower, and oil is flat to 10 points lower. The Brazilian real remains very cheap, as well, hurting U.S. export competitiveness on the world front. South American weather remains within the recent pattern for soybeans, as well, with early harvest underway. Basis has remained steady to firmer at processors with the strong crush margins. The weather is likely starting to allow for better movement short term. The March chart support is the $8.82 contract low, with resistance the $9.00 area. WHEAT Wheat trade is 2 to 5 cents lower at midday with trade fading a bit. Range-bound action is continuing after holding up better on Monday. Cold threats remain limited for the Plains with limited potential for moisture in the short term. KC is at an 88-cent discount to Chicago near the top of the recent range, while Minneapolis is back to a 25-cent discount. Russian values remain elevated with trade looking for confirmation of various milling grades to China in the short term. The March KC chart support is the lower Bollinger band at $4.71, and resistance is the 20-day at $4.87. David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered adviser. He can be reached at dfiala@futuresone.com Follow him on Twitter @davidfiala (AG) Copyright 2020 DTN/The Progressive Farmer. All rights reserved.

DTN Weather Trend Indicators 01/28 09:15 Weather Indicator status values are: Corn=Neutral Soybeans=Down Wheat=Down LEGEND: The indicator choices are: Corn, Soybeans, Wheat The status choices are: Up, Down, Neutral For example: Corn=Neutral (ES)

DTN Early Word Grains 01/28 05:59 Grains See Follow-Through Weakness March corn is down 1 1/4 cents per bushel, March soybeans are down 7 3/4 cents, and March KC wheat is down 4 1/4 cents. By Tregg Cronin DTN Contributing Analyst 6:00 a.m. CME Globex: March corn is down 1 1/4 cents per bushel, March soybeans are down 7 3/4 cents, and March KC wheat is down 4 1/4 cents. CME Globex Recap: Financial markets are stabilizing overnight as traders seem to be coming to grips at least somewhat with the coronavirus. The death toll in China has moved over 100 and Hong Kong has closed rail links with mainland China to try and help contain the virus. The virus has increased from 3,000 cases Monday to close to 4,500 in less than a day as scientists predict the virus will get worse before it gets better. Grain markets are stabilizing somewhat from Monday's weaker trade as traders realize the number of animals around the globe didn't get cut in half from last week. Still, the uncertainty of a virus like this in the world's second largest economy is unnerving and may take several days before the downdraft is completely shook loose. Soybean oil is leading losses again overnight, following losses in Malaysian Palm Oil which was down 10% in the front-month contract as the coronavirus hits much closer to home. OUTSIDE MARKETS: Previous closes on Monday showed the Dow Jones Industrial Average down 453.93 at 28,535.80 and the S&P 500 down 51.84 at 3,295.47 while the 10-Year Treasury yield ended at 1.605%. Early Tuesday, the March DJIA futures are up 71 points. Asian markets are lower with Japan's Nikkei 225 down 127.8 (-0.55%) and China's Shanghai Composite down 84.23 points (-2.75%). European markets are mixed with London's FTSE 100 up 13.89 points (0.19%), Germany's DAX down 14.79 points (-0.11%) and France's CAC 40 up 5.29 points (0.09%). The March Euro is up 0.001 at 1.110 and the March U.S. dollar index is up 0.023 at 97.790. The March 30-Year T-Bond is up 11/32nds, while February gold is up $1.20 at $1,578.60 and March crude oil is down $0.32 at $52.82. Soybeans on China's Dalian Exchange were down 0.7% while soybean meal was down 0.88%.

Market Matters Blog 01/27 12:01 Corn Basis Still Showing Off DTN Weekly Average DDG Price Slightly Higher Wheat Is the Word DTN Weekly Average DDG Price Steady 2020 Spending Bill Gives Money to Aging US Waterways; Is It Enough? DTN Weekly Average DDG Price Weaker 2019 Corn Harvest: Will it Ever End? DTN Weekly Average DDG Price Steady FDA Inspections on the Rise to Ensure Facilities are FSMA Compliant DTN Weekly Average DDG Price Stronger ****************************************************************************** Corn Basis Still Showing Off The DTN national average corn basis started to climb above the five-year average beginning in March. By the end of May, the basis was beginning to climb towards the five-year maximum average basis, surpassing that mark on July 3, and has not looked back since. I wrote about the strong corn basis on July 8, 2019, talking about what was causing all the commotion. Here is a link to that story: https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201 9/07/08/corn-basis-heats-sign-cooling Fast forward to today: while basis has backed off a little in the Eastern Corn Belt as farmers have started selling cash corn, according to various merchandisers -- that is not the case in the Western Corn Belt, where harvest conditions and quality have been a problem. I recently did a 2019 corn harvest story that painted a picture of how rough 2019 was (and in some areas is) for new crop corn; another cause of the strength in the basis. https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/202 0/01/06/2019-corn-harvest-will-ever-end So, what else is causing the strength in the corn basis? It's not for a lack of corn, especially given the poor export demand we have seen this crop year. In the Jan. 10 USDA report, corn production was forecast at 13.69 billion bushels (bb) with a national average yield of 168 bushels per acre (bpa), 1 bpa higher than the prior month's forecast. Corn quarterly stocks were down 5% from the same time last year. As for export demand, in the most recent WESS report, the USDA said that corn export commitments for the week ending Jan. 16 were 37% below the same time one year ago. The Jan. 10 report surprised many, given that in December 2019 there was still unharvested corn throughout the Midwest, counted as "on-farm" storage by USDA. However, in the Jan. 10 report, USDA posted a special note that it would resurvey farmers regarding unharvested corn acreage in Michigan, Minnesota, North Dakota, South Dakota and Wisconsin. On Jan. 3, in the USDA NASS December 2019 "Crop Progress -- State Stories," many of the Midwest states reported on their unharvested corn acreage. North Dakota reported that corn harvest was 48% completed, while Minnesota reported that there was still corn standing that "would likely not be harvested until spring." Minnesota NASS added, "Producers leaving corn harvest until spring cite high moisture and poor test weights as being a big concern, while for other producers it's an issue with field conditions." Michigan NASS noted that, "Grain condition degraded quickly after Dec. 1. Corn harvest continued in certain locales into 2020." South Dakota reported that harvest was 90% complete, while Wisconsin noted the warm weather in December resulted in muddy fields, slowing down harvest. "Corn and soybean harvest, as well as manure spreading, continued through December. A fair amount of corn is still standing." One question that comes to mind for some is what the quality of the unharvested corn is, especially in the Upper Midwest where test weight was a problem in the new crop; another case for the strong basis for #2YC, the industry standard that prices are based off. Many elevator merchandisers have told me that while the lower test weight corn is finding a home at many U.S. ethanol plants, exporters are struggling to make a #2YC grade for export to countries who demand that grade, which is a minimum 54 pounds. Export basis has remained strong to the Pacific Northwest for #2YC and discounts for #3YC, a minimum of 52 pounds, have narrowed recently to just a 5-cent spread. Also causing some problems for many buyers, not just the PNW, is the Broken Corn and Foreign Material (BCFM, a big problem for many this year because so much of the new crop corn needed to be dried and that increases the broken kernels as the corn is handled more than the norm. The maximum allowed for #2YC is 3% BCFM and #3YC is 4% BCFM. Basically, we have plenty of corn inventory in the U.S., but not enough good quality corn to satisfy all the buyers. I spoke to Matt Wiegand, a broker for FuturesOne Risk Management Company in Lincoln, Nebraska, and he told me that in the past week there was a little more basis push because of farmers who have "bin sides with mud or have to truck on gravel" and were unable to do much in the way of loading and moving grain. I asked him to give me an idea of basis in his draw area. "I'd say that through south-central Nebraska, basis is 3 to 5 cents better than normal and I think the more interesting thing is that some of the more out of the way locations are bidding up a bit more. For example, Red Cloud, Nebraska, shuttle loader was bidding the same as Fairmont within the Cooperative Producers, Inc. (CPI) chain. And usually that is a 3-5 cent spread." Wiegand noted that eastern Nebraska elevators and terminals seem to be about a nickel better than usual for this period, and northeast Kansas was seen bidding up earlier than usual with Bartlett versus Cargill in the Atchison/Topeka areas. "White corn bidding has been more aggressive than usual with Dorchester Co-op pulling loads forward and having a 10-cent premium to CPI/Andersons and usually that is flat to the other way. Southwest Nebraska has seen some good feedlot bids for picked up relative to local rail facilities, with the farmer picking up about 15 cents at the bin versus delivered." Angie Setzer, vice president of Grain Citizens LLC said, "We're seeing two very different market structures here in Michigan as of late, with feeders paying substantially more than ethanol producers in an attempt to get bushels moving to them from non-traditional areas, and it seems to be working." I mentioned to her that I had heard that some farmers are not selling right now because of the expectations for a third Market Facilitation Program (MFP) payment. "I'm not necessarily seeing farmers hold tight because of MFP payments, but obviously if cash isn't motivating them and they think they should be getting more for their product, they won't be active sellers," said Setzer. "For me here, we have a decent amount of bushels moving for the typical cash flow reasons as well as quality concerns. The weather hasn't been too terrible around here either, allowing folks to get out and get some loads shipped." I checked in with her after seeing some recent weakness in basis in the East and Southeast and she told me that feeders are still paying substantially more, but this past week it's just kind of "weaker across-the-board" scenario. As we continue to see a historical corn basis this crop year, it will be interesting to watch how long this will last as we head closer to spring. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** DTN Weekly Average DDG Price Slightly Higher OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price from the 40 locations DTN contacted was up $1 on average at $150 per ton for the week ended Jan. 23. Prices were slightly higher on average as cash corn prices moved higher this week. Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Jan. 23 was at 106.68%. The value of DDG relative to soybean meal was at 50.18%. The cost per unit of protein for DDG was $5.56, compared to the cost per unit of protein for soybean meal at $6.29. The Energy Information Administration reported Thursday morning that, for the week ended Jan. 17, domestic ethanol inventory continued to build in spite of producers cutting production more than 4% from a near-two-year high, while blending demand continued to rise. In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS markets are still quiet this week, but prices are firming across the board. Barge CIF NOLA values are $1-$2 per metric ton (mt) higher this week for spot positions while April delivery quotes are up $3/mt. U.S. rail rates are continuing to firm as well, up $2/mt this week. FOB NOLA offers are mostly steady with a relatively flat forward curve, while prices for 40-foot containers for Southeast Asia are up $1-$2/mt this week. The average quote for February containers to Southeast Asia is $249/mt." Once again, high water is causing slowdowns for barges heading southbound to the Gulf. American Commercial Barge Line noted that, "Due to heightened river levels, southbound tows on the Lower Miss have been reduced by five to 10 loads. Expect these tow restrictions to remain in effect well into February basis current forecasts." In addition, ACBL notes that, because of high river levels, transit at Memphis, Vicksburg and Baton Rouge is restricted to daylight only. * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans) * FOB (free on board means buyer pays costs of ocean freight, insurance, unloading, and transportation from originating port) ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE COMPANY STATE 1/23/2020 1/16/2020 Bartlett and Company, Kansas City, MO (816-753-6300) Missouri Dry $166 $165 $1 Wet $83 $83 $0 Show Me Ethanol LLC, Carrollton, MO (660-542-6493) Missouri Dry $160 $165 -$5 Wet $82 $80 $2 CHS, Minneapolis, MN (800-769-1066) Illinois Dry $155 $155 $0 Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Michigan Dry $145 $145 $0 Minnesota Dry $140 $140 $0 North Dakota Dry $145 $145 $0 New York Dry $155 $155 $0 South Dakota Dry $140 $140 $0 MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) Kansas Dry $155 $155 $0 POET Nutrition, Sioux Falls, SD (888-327-8799) Indiana Dry $155 $155 $0 Iowa Dry $138 $137 $1 Michigan Dry $150 $145 $5 Minnesota Dry $138 $135 $3 Missouri Dry $158 $155 $3 Ohio Dry $160 $155 $5 South Dakota Dry $158 $158 $0 United BioEnergy, Wichita, KS (316-616-3521) Kansas Dry $165 $165 $0 Wet $65 $65 $0 Illinois FEB Dry $164 $164 $0 Nebraska Dry $160 $160 $0 Wet $65 $65 $0 U.S. Commodities, Minneapolis, MN (888-293-1640) Illinois Dry $155 $155 $0 Indiana Dry $155 $155 $0 Iowa Dry $140 $140 $0 Michigan Dry $150 $150 $0 Minnesota Dry $140 $140 $0 Nebraska Dry $145 $145 $0 New York Dry $160 $170 -$10 North Dakota Dry $150 $150 $0 Ohio Dry $160 $160 $0 South Dakota Dry $140 $140 $0 Wisconsin Dry $143 $140 $3 Valero Energy Corp, San Antonio Texas Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Minnesota Dry $140 $140 $0 Nebraska Dry $145 $145 $0 Ohio Dry $160 $160 $0 South Dakota Dry $140 $140 $0 California Dry $204 $204 $0 Western Milling, Goshen, California (559-302-1074) California Dry $215 $215 $0 *Prices listed per ton. Weekly Average $150 $149 $1 The weekly average prices above reflect only those companies DTN collects spot prices from. States include: Missouri, Iowa, Nebraska, Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, Wisconsin and Indiana. Prices for Pennsylvania, New York and California are not included in the averages. ** VALUE OF DDG VS. CORN & SOYBEAN MEAL Settlement Price: Quote Date Bushel Short Ton Corn 1/23/2020 $3.9375 $140.63 Soybean Meal 1/23/2020 $298.90 DDG Weekly Average Spot Price $150.00 DDG Value Relative to: 1/23 1/16 Corn 106.68% 111.10% Soybean Meal 50.18% 49.57% Cost Per Unit of Protein: DDG $5.56 $5.52 Soybean Meal $6.29 $6.33 Notes: Corn and soybean prices take from DTN Market Quotes. DDG price represents the average spot price from Midwest companies collected on Thursday afternoons. Soybean meal cost per unit of protein is cost per ton divided by 47.5. DDG cost per unit of protein is cost per ton divided by 27. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** Wheat Is the Word Few financial assets have gotten off to as good of a start this year as Chicago wheat has, adding over 5.0% in 2020 to pair with its 11.0% gain in 2019. While the performance itself has been impressive, it is also worth noting Chicago wheat is now challenging the highest levels since 2015 after scraping decade lows just a couple years prior. So, it begs the question of where the strength is coming from, and with wheat, the answer is always more nuanced than it appears on the surface. When discussing wheat, it is always best to start with a look at the by-class balance sheet. The soft red winter (SRW) wheat balance sheet saw planted acres in 2019-20 fall to the lowest since 2010-11, while harvested acres fell to 3.733 million, which were the lowest on record going back to 1986-87. Total supplies for the 2019-20 marketing year fell to 402 million bushels (mb) from 495 mb the year before, and were also the lowest since 1986-87. The low wheat prices from 2015 to 2019 have slowly been doing their job as carryout dropped from a seven-year high in 2016-17 of 215 mb to a projected 106 mb in 2019-20. Winter wheat acres planted in the fall of 2019 totaled 5.64 million acres versus 5.201 million the year before, according to USDA, so there is a possibility we've seen the low-water mark for SRW acreage While supplies on the balance sheet are important, supplies held in CME Group deliverable warehouses are even more important. The wheat held in these warehouses is known as "the supply of last resort" as CBOT futures are backed by physical product as opposed to cash-settled indices on other exchanges. As of Jan. 17, there were 22.845 mb of soft red wheat in deliverable warehouses. This was down 1.887 mb on the week, and down a little over 30 mb from the year before to the lowest deliverable stocks since 2007-08. The 30 mb drop is down 56% from the previous year, which is drastically more than the 18.7% decline the USDA sees in total wheat stocks. If an end user cannot buy wheat in the cash market, they should always be able to stand in for delivery by being long Chicago wheat futures. If the supply of deliverable stocks and the amount of wheat registered for delivery declines to levels like we are seeing now, it is a good indicator the holder of that wheat and those delivery receipts is not going to part ways with them easily. The struggle between end users wanting to own wheat and commercials not wanting to part with their stocks helps us think about how futures can rise and calendar spreads can tighten. Supply has been the largest driver of the price rally, but demand has also played a crucial role. The wheat behind the Chicago contract is SRW wheat, which is ideal for low-protein products like crackers and pastries. While no commodity demand is completely inelastic, there are times when a certain class of wheat can bring a value much higher than what one would perceive. Cash basis along the Ohio and Mississippi river systems is trading at 40 to 50 cents above gross delivery equivalence, meaning end users are having a very difficult time sourcing the bushels and the quality they need. Bids at the Gulf of Mexico for No. 2 SRW wheat are currently around 120 to 130 cents above the March futures board. These values would be 30 to 40 cents above a year ago and 60 to 70 cents above the three-year average. Countries like Egypt wouldn't take a second look at U.S. SRW wheat at these prices, but places like Mexico, Columbia and Nigeria remain consistent buyers because of the end use qualities they need. One cannot talk about wheat and basis without discussing calendar spreads. The March/May calendar spread is trading a 1.25-cent inverse at the time of this writing. This compares with a 5.75-cent carry a year ago, a 12.75-cent carry two years ago and a 13.75-cent carry in 2017. For many years, Chicago wheat was the darling of managed funds because of the huge carries offered from the Variable Storage Rate (VSR) program. The hefty supplies of SRW wheat and the relatively tepid demand created great incentive for commercials to store wheat and funds to remain short futures. When funds are long and roll in a carry market, their "purchase price" is increased by the amount of carry. When funds are short in a carry market, however, their "sale price" is improved by the amount of carry. If futures volatility stayed low, as it did in wheat from 2015-19, funds could simply collect the positive roll yield from being short and deploy risk capital in other markets. As supply dynamics began to change in 2019, so too did calendar spreads. Funds losing their carry market can be illustrated rather clearly when examining their positions from the CFTC. Funds ballooned their net-short position in Chicago wheat to 117,833 contracts on April 30, which was the largest net short since January 2018. Funds began to cover that position into summer, hitting a net short of 13,693 contracts on July 2 after harvest. They built the position back to a net short of 56,685 contracts on Sept. 3 before covering and going net long 6,424 contracts as of last week's data. To give a sense of just how rare it is that funds are net long in Chicago wheat, the average fund position for all weeks going back to Jan. 1, 2007, is a net short of 53,778 contracts. The amount of carry or inverse in Chicago wheat is likely to be a large indicator of fund positioning in 2020. Chicago wheat has enjoyed an impressive run to finish 2019 and begin 2020. Much of the rally has been driven by the drop in SRW wheat production inside the United States due to weather and years of low prices. Producers responded to the oversupply situation by cutting planted acres to decade lows while Mother Nature cut harvested acres to record lows. Because of the unique characteristics of SRW wheat, the highest prices in nearly five years have not completely shut off demand. Finally, the structural changes to the Chicago wheat market removed the comfortable carries so many have been accustomed to, including managed funds. The speculative community responded in kind by moving to a very rare net-long position. The question now becomes whether they will be comfortable in extending that long position throughout 2020. Tregg Cronin can be reached at tmcronin31@gmail.com Follow Tregg Cronin on Twitter @5thWave_tcronin ****************************************************************************** DTN Weekly Average DDG Price Steady OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price from the 40 locations DTN contacted was unchanged at $149 per ton for the week ended Jan. 16. Prices were steady on average this week, with an uptick seen in California prices. The weekly Energy Information Administration report showed that, for the week ended Jan. 10, ethanol plant production jumped over 3% after two straight weekly declines. Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Jan. 16 was at 111.10%. The value of DDG relative to soybean meal was at 49.57%. The cost per unit of protein for DDG was $5.52, compared to the cost per unit of protein for soybean meal at $6.33. In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS markets are still quiet this week with much of the trade watching for the details of the U.S.-China trade agreement. Barge CIF NOLA values are $1 to $2 metric ton (mt) higher this week with winter storms across the Midwest tightening logistics. U.S. rail rates are increasing for the same reason as well. FOB NOLA offers are steady/slightly higher amid moderate international demand. Prices for 40-foot containers to Southeast Asia are $1/mt higher on average this week, with notable price increases for product destined for Vietnam and Thailand." * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans) * FOB (free on board means buyer pays costs of ocean freight, insurance, unloading, and transportation from originating port) ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE COMPANY STATE 1/16/2020 1/9/2020 Bartlett and Company, Kansas City, MO (816-753-6300) Missouri Dry $165 $165 $0 Wet $83 $83 $0 Show Me Ethanol LLC, Carrollton, MO (660-542-6493) Missouri Dry $165 $165 $0 Wet $80 $80 $0 CHS, Minneapolis, MN (800-769-1066) Illinois Dry $155 $155 $0 Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Michigan Dry $145 $145 $0 Minnesota Dry $140 $140 $0 North Dakota Dry $145 $145 $0 New York Dry $155 $155 $0 South Dakota Dry $140 $140 $0 MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) Kansas Dry $155 $160 -$5 POET Nutrition, Sioux Falls, SD (888-327-8799) Indiana Dry $155 $155 $0 Iowa Dry $137 $137 $0 Michigan Dry $145 $145 $0 Minnesota Dry $135 $135 $0 Missouri Dry $155 $155 $0 Ohio Dry $155 $155 $0 South Dakota Dry $158 $158 $0 United BioEnergy, Wichita, KS (316-616-3521) Kansas Dry $165 $165 $0 Wet $65 $65 $0 Illinois FEB Dry $164 $160 $4 Nebraska Dry $160 $160 $0 Wet $65 $65 $0 U.S. Commodities, Minneapolis, MN (888-293-1640) Illinois Dry $155 $155 $0 Indiana Dry $155 $155 $0 Iowa Dry $140 $140 $0 Michigan Dry $150 $150 $0 Minnesota Dry $140 $140 $0 Nebraska Dry $145 $145 $0 New York Dry $170 $170 $0 North Dakota Dry $150 $150 $0 Ohio Dry $160 $160 $0 South Dakota Dry $140 $140 $0 Wisconsin Dry $140 $140 $0 Valero Energy Corp, San Antonio Texas Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Minnesota Dry $140 $140 $0 Nebraska Dry $145 $145 $0 Ohio Dry $160 $160 $0 South Dakota Dry $140 $140 $0 California Dry $204 $202 $2 Western Milling, Goshen, California (559-302-1074) California Dry $215 $210 $5 *Prices listed per ton. Weekly Average $149 $149 $0 The weekly average prices above reflect only those companies DTN collects spot prices from. States include: Missouri, Iowa, Nebraska, Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, Wisconsin and Indiana. Prices for Pennsylvania, New York and California are not included in the averages. VALUE OF DDG VS. CORN & SOYBEAN MEAL Settlement Price: Quote Date Bushel Short Ton Corn 1/16/2020 $3.7550 $134.11 Soybean Meal 1/16/2020 $300.60 DDG Weekly Average Spot Price $149.00 DDG Value Relative to: 1/16 1/9 Corn 111.10% 108.86% Soybean Meal 49.57% 50.30% Cost Per Unit of Protein: DDG $5.52 $5.52 Soybean Meal $6.33 $6.24 Notes: Corn and soybean prices take from DTN Market Quotes. DDG price represents the average spot price from Midwest companies collected on Thursday afternoons. Soybean meal cost per unit of protein is cost per ton divided by 47.5. DDG cost per unit of protein is cost per ton divided by 27. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** 2020 Spending Bill Gives Money to Aging US Waterways; Is It Enough? Late on Dec. 20, 2019, President Donald Trump signed into law the 2020 spending bills. Contained in the spending package for fiscal 2020 was $7.65 billion for the civil works mission of the U.S. Army Corps of Engineers (USACE), which oversees the inland waterways system and port dredging. That amount is $652 million above the current spending level and $2.69 billion more than the president had requested earlier this year, according to the Waterways Council (WCI), an industry-funded group that advocates for waterways spending. The bill also includes another provision sought by the waterways industry, which is full use of the estimated receipts of the Inland Waterways Trust Fund (IWTF) that includes additional prior-year revenues to produce a strong investment level of $317 million for spending on needs of the antiquated inland waterways system during the next fiscal year, according to WCI. The IWTF was established to help underwrite the costs of construction and major rehabilitation of the nation's inland waterway system. "Funds are generated via the Inland Waterways Tax: a 29 cent per gallon assessment on diesel fuel used on 27 stretches of the country's inland waterway system. The 12,000 miles of fuel taxed waters include most of the nation's largest rivers: the Mississippi, Ohio, Illinois, the lower Missouri, and the Gulf and Atlantic Intracoastal waterways," notes the Soy Transportation Coalition (STC) on their website. According to the STC, the fund annually generates approximately $110 million to $120 million per year via the IWTF. These funds are then matched with revenue from the U.S. Treasury. The total $220 million to $240 million is directed toward construction and major rehabilitation projects. The U.S. Treasury assumes 100% of the costs of operations and maintenance. The American Association of Port Authorities (AAPA) praised the funding bills, saying the $225 million allocated for port infrastructure will be spent on improvements to gate operations, roads and rail within and connecting ports, ship berths and cargo operations. "Ultimately much more is needed, but this package reflects the association's ongoing priorities for improving the critical infrastructure that is represented at America's seaports and will go a long way to enhancing trade and transportation across the nation," said AAPA President Chris Connor in a statement. AAPA also noted the Corps of Engineers received a 12% increase in spending for deep-draft dredging projects and got money for a regional demonstration program to respond more effectively to critical national dredging requirements along the Gulf coast between Louisiana and Alabama. Here is a link to a story I did on the importance of non-flood related dredging in the Lower Mississippi River. A study by the STC shows doing so would have a positive impact on farmers who haul soybeans and other grains to river terminals that eventually send them down the Mississippi to the Gulf of Mexico for export: https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201 9/08/05/dredge-will-come . A DROP IN THE INFRASTRUCTURE BUCKET? The spending package includes $75.3 million to begin construction of a new Soo Lock. It will take seven to 10 years and $1 billion to build another lock, and this money will cover the first year of work. "This would be the first time in decades that construction of a new lock at the Soo has received funding appropriated by Congress. Construction of a new lock was first authorized in 1986 and again in 2007, but leaders in Washington then were unable to get funding for the construction," said Congressman John Moolenaar, R-Mich., on his website. Congressman John Moolenaar is Michigan's senior member of the House Appropriations Committee and has been a strong advocate for construction of the Soo Locks. In August 2019, the U.S. Department of Agriculture (USDA) released a significant new study that quantifies the cost-savings and competitive advantages that would accrue from investing in long-delayed improvements to the inland waterways locks and dams on the Upper Mississippi and Illinois River system: https://www.ams.usda.gov/services/transportation-analysis/inland-waterways-repor t . This study is a warning that failure to modernize those and other locks and dams, "increases costs of U.S. farm exports and helps Brazilian exporters close the cost gap with the United States." The study also pointed out what has been obvious for years; that U.S. barge traffic delays on the Mississippi and other rivers continue to rise as a result of growing lock and dam malfunctions. The added costs associated with those delays are ultimately passed on to shippers, especially farmers. That means farmers will get a lower price for their commodities shipped on the inland waterways system. The Mississippi River System is America's primary inland waterways system. It comprises the Mississippi, Arkansas, Illinois, Ohio and Tennessee Rivers, and Gulf Intracoastal Waterway. "This extensive waterway system feeds exports from grain elevators from Baton Rouge through New Orleans, to Myrtle Grove, Louisiana. This region handles 57% of U.S. corn exports in volume (valued at $4.8 billion) and 59% of U.S. soybean exports ($12.4 billion), as well as 55% of soybean meal exports and 72% of distiller's dried grains exports," said USDA in the study results. The study noted without "consistent, predictable funding, the grain and soybean export draw area around the waterways system could shrink from an average of 150 miles, currently, to as little as 75 miles under a constrained scenario, as the cost to ship on the river increases." For corn, delays on the Mississippi River could have up to a 24 cent per bushel impact, while impact to soybeans could be up to 25 cents per bushel. The river's infrastructure continues to deteriorate and major flood events like in 2019 put even more stress on locks and dams. Most of the locks and dams were built in the 1930s with a life expectancy of maybe 50 years. In March 2019, the U.S. Army Corps of Engineers estimated the backlogged maintenance cost for locks and dams of the Mississippi and Illinois rivers is more than $1 billion. https://www.mvr.usace.army.mil/About/Offices/Programs-and-Project-Management/Dis trict-Projects/Projects/Article/1164618/backlog-of-maintenance-major-rehabilitat ion-and-major-maintenance-mississippi-r/ . There have been many lock and dam failures recently due to barges striking them during flooding or heavy ice events, but also due to structural failures because of old age. The Corps has been relentless in making repairs on top of normal maintenance, but eventually that may not be enough to keep those locks and dam functional. A major failure at any of the locks and dams would paralyze commerce along the river. The U.S. government needs to get serious about properly funding the waterways infrastructure to prevent that from happening. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** DTN Weekly Average DDG Price Weaker OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price from the 40 locations DTN contacted was $1 per ton lower on average at $149 per ton for the week ended Jan. 9. Prices were mixed this week as the cash corn market remains flat. The weekly Energy Information Administration report showed plants reduced ethanol production, but DDG supplies versus current demand don't appear to be affected. Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Jan. 9 was at 108.86%. The value of DDG relative to soybean meal was at 50.30%. The cost per unit of protein for DDG was $5.52, compared to the cost per unit of protein for soybean meal at $6.24. In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS markets are still quiet this week as traders emerge from the holiday lull. Merchandisers report active inquiries from Asian buyers, but sales are slow so far. Barge CIF NOLA values are $1 to $2 metric ton (mt) lower this week but forecasts for winter weather across much of the Midwest this weekend/early next week could tighten the market due to logistics issues. FOB Gulf values are $3/mt lower for spot shipment while deferred positions are mostly steady. Asking prices for 40-foot containers to Southeast Asia are steady for January shipment at $246/mt while February/March values are slightly lower." Barges moving south in the Lower Mississippi River from Cairo to the Gulf are currently subject to reduced tow sizes and safety protocols because of high water there. American Commercial Barge Line noted in their daily river update "a significant rain event is expected to impact the river system beginning tonight, 1/9, and lasting through Saturday, 1/11. The pattern is currently predicted to drop 4-7 inches of rain in St. Louis and the Illinois River. This amount of rain could impact the Lower Miss and Gulf areas in the coming weeks." * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans) * FOB (free on board means buyer pays costs of ocean freight, insurance, unloading, and transportation from originating port) ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE COMPANY STATE 1/9/2020 1/2/2020 Bartlett and Company, Kansas City, MO (816-753-6300) Missouri Dry $165 $165 $0 Wet $83 $83 $0 Show Me Ethanol LLC, Carrollton, MO (660-542-6493) Missouri Dry $165 $165 $0 Wet $80 $80 $0 CHS, Minneapolis, MN (800-769-1066) Illinois Dry $155 $155 $0 Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Michigan Dry $145 $145 $0 Minnesota Dry $140 $140 $0 North Dakota Dry $145 $145 $0 New York Dry $155 $155 $0 South Dakota Dry $140 $140 $0 MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) Kansas Dry $160 $160 $0 POET Nutrition, Sioux Falls, SD (888-327-8799) Indiana Dry $155 $155 $0 Iowa Dry $137 $140 -$3 Michigan Dry $145 $145 $0 Minnesota Dry $135 $139 -$4 Missouri Dry $155 $158 -$3 Ohio Dry $155 $160 -$5 South Dakota Dry $158 $158 $0 United BioEnergy, Wichita, KS (316-616-3521) Kansas Dry $165 $165 $0 Wet $65 $65 $0 Illinois FEB Dry $160 $160 $0 Nebraska Dry $160 $160 $0 Wet $65 $65 $0 U.S. Commodities, Minneapolis, MN (888-293-1640) Illinois Dry $155 $155 $0 Indiana Dry $155 $155 $0 Iowa Dry $140 $145 -$5 Michigan Dry $150 $150 $0 Minnesota Dry $140 $140 $0 Nebraska Dry $145 $165 -$20 New York Dry $170 $170 $0 North Dakota Dry $150 $150 $0 Ohio Dry $160 $160 $0 South Dakota Dry $140 $140 $0 Wisconsin Dry $140 $140 $0 Valero Energy Corp, San Antonio Texas Indiana Dry $150 $150 $0 Iowa Dry $140 $135 $5 Minnesota Dry $140 $135 $5 Nebraska Dry $145 $145 $0 Ohio Dry $160 $155 $5 South Dakota Dry $140 $140 $0 California Dry $202 $208 -$6 Western Milling, Goshen, California (559-302-1074) California Dry $210 $216 -$6 *Prices listed per ton. Weekly Average $149 $150 -$1 The weekly average prices above reflect only those companies DTN collects spot prices from. States include: Missouri, Iowa, Nebraska, Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, Wisconsin and Indiana. Prices for Pennsylvania, New York and California are not included in the averages. VALUE OF DDG VS. CORN & SOYBEAN MEAL Settlement Price: Quote Date Bushel Short Ton Corn 1/9/2020 $3.8325 $136.88 Soybean Meal 1/9/2020 $296.20 DDG Weekly Average Spot Price $149.00 DDG Value Relative to: 1/9 1/2 Corn 108.86% 107.28% Soybean Meal 50.30% 49.90% Cost Per Unit of Protein: DDG $5.52 $5.56 Soybean Meal $6.24 $6.33 Notes: Corn and soybean prices take from DTN Market Quotes. DDG price represents the average spot price from Midwest companies collected on Thursday afternoons. Soybean meal cost per unit of protein is cost per ton divided by 47.5. DDG cost per unit of protein is cost per ton divided by 27. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** 2019 Corn Harvest: Will it Ever End? As the calendar turned to 2020, corn harvest in the U.S. was not 100% complete. In the last weekly Crop Progress report for 2019, USDA reported that as of Dec. 8, 92% of the U.S. corn crop had been harvested. That was hardly obvious in North Dakota where only 43% of the crop had been harvested as of that date, while South Dakota was at 83% and Michigan and Wisconsin were 74% completed. On Jan. 2, North and South Dakota updated their corn harvest as of Dec. 31 versus the Dec. 8 report with North Dakota reporting harvest 48% complete and South Dakota reporting 90% of its corn harvested. Besides the late harvest in many states, the weather was unkind to the quality of the crop, with many farmers reporting low test weights, more broken kernels and other discountable grade factors. Perhaps one of the biggest challenges during the 2019 corn harvest was that the corn was wet and needed drying. Farmers faced drying charges, and in the Upper Midwest, propane shortages left farmers and some elevators unable to dry corn, causing a slowdown in harvest, on top of the major snowstorms that started as early as Oct. 1. I spoke to farmers and elevators in a few different states and asked how their harvest went, extra costs they faced and what other challenges they faced in 2019. Here were their comments: Cory Tryan, grain department manager at Alton Grain Terminal LLC in Hillsboro, North Dakota, told me that the 90-plus-day corn varieties planted between May 10 and end of May mostly didn't make black layer before the first hard freeze and remain at 50 pounds per bushel (lbs./bu) or less. "The majority of this corn will likely be left in the field due to high moistures being stuck in mid- to upper-20s and poor quality. When dried mechanically, it generally loses some test weight, breaks up bad and likely will not store well. It is unclear if anything improves on immature corn if harvested next spring. Our experiences carrying corn to next spring successfully was mature black-layered corn that continued to field dry and add test weight." He noted that, at the end of December, there was about 60% of the corn left in the field until spring and much of it is immature. "We have somewhere in the area of 40% of our corn left to harvest," said Keith Brandt, general manager of Plains, Grain and Agronomy in Enderlin, North Dakota. "That corn was tested at 26% to 30% plus moisture in early to mid-November. Since then, some of that has field dried to 21% to 23% and possibly gained 2 lbs./bu of test weight. That puts that corn at over 50 lbs./bu, with some as high as 51.5. The 50 lbs. corn has a 20-cent discount and then 5 cents each 1/2 pound below 50 lbs." Brandt said their biggest challenge was trying to keep combining after the recent snowstorm, which increased the snow depth in the fields. "We might have a lot of cobs in snow now; we need that January thaw!" said Brandt. "In addition, the snow that came after Thanksgiving insulated the ground and it has now thawed out. So, we battle mud in the fields and roads in areas that aren't regularly plowed out, so you have to plow the road." Matthew Krueger of K & D Krueger Farms & Sons in East Grand Forks, Minnesota, told me on Dec. 30, "Well, we are still doing corn harvest. We are about 48% complete, and when we hand-shelled out the next fields, it showed that it was close to 28% moisture! We also just got 16 inches of snow dumped on us, so 2019 isn't done yet. "Our first acres looked good, but after we got it combined, it ran 35% under projection. This wasn't a planned hit. We also have had test weight be highly variable by variety. Our best field averaged 54 lbs./bu, but our worst has been 51 lbs. We suspect these last acres that are still wet are in probably worse shape (maybe 48 lbs./bu). What a year; we just want it to be done." Krueger said they can't combine in the snow until the temperatures get colder. "If we can get 10 degrees and colder, we can combine with snow on the corn and have no issues. At this point, we figure it's not going anywhere. The stalks seem to be in okay shape to support the plant a while longer. I don't know if we are keen on leaving the corn out there until March/April, but sadly, we may just have to." Tin Dufault, Crookston, Minnesota, told me that as of Christmas, he estimated 66% of the corn in that area is harvested. "Growers will be waiting on the rest of the crop until late winter/early spring to finish; hoping the corn will dry down, but not breakdown." Josh Backstrom, Maddock, North Dakota, said that they experienced the third spring in a row that was extremely dry, with a lot of wheat and corn seed going into dry dirt, only to be saved at the last minute with a much-needed rain event in mid-late May. "We had beautiful rains in June, and then shutting off again in July and August, hurting the later season row crops. The difference this year was record rains in September followed by 30 inches of wet snow from the Oct. 10 blizzard. Thankfully, the weather cooperated enough to melt most of the snow and then freeze hard enough to get the combines across the fields to get everything in except the areas that still had snow drifts and all the sloughs that were plumb full of water. After that hard battle, we thought the worst was over. "Little did we know that a combination of not enough GDUs (growing degree units) in August and September and a very cold and humid October left a lot of our corn from reaching full maturity and drying down. We grow a range from 81- to 88-day corn. In November, the early stuff was low to mid-20% range while the later was 28% to 30% moisture. Test weights range from 44 to 52 lbs./bu wet, depending on hybrid. The FM (foreign material) is higher in general this year, but way worse in the really wet, immature stuff. "So far to date we've combined about 25% of our corn crop, most of it being earlier maturities. The fields we have left are a lot of hybrid side-by-side trials of all different maturities scattered throughout the fields. We are going to have to blend all these together to bring up the average test weight; what better way to do it than right in the field as we combine. We are going to have to wait a bit longer to lower the average moisture, and to try and preserve the test weight as much as possible. We are still going out every couple weeks to sample and the really wet 28% to 30% is now down to 25% to 26%." Ryan Wagner, Wagner Farms, Roslyn, South Dakota, told me that they didn't quite finish corn harvest before the late December weekend storm, but did get close. "Many in the area are either done or very close to done, but there still is quite a bit of corn standing in northeast South Dakota, especially north of highway 212. We have about 10% still standing in the field and hope to be able to get at that as soon as the snow gets off the plants or it gets cold enough to flow through; we will just have to take a loader tractor with us wherever we go. "It's been a tough weather year, but since the ground has been frozen we haven't had much trouble getting around in fields and haven't been stuck outside of the occasional truck needing a pull because we couldn't get traction in the snow. Yields have been pretty good considering we didn't quite make it to maturity, and if we would have had any heat at all in late August and September to finish it off, we could have had record yields." Wagner said that when they started corn harvest back on Nov. 2 the moisture was 26% to 28%, but it dropped down into the 20% to 22% range when they were last in the field Dec. 23 ahead of the storm. "Moisture discounts are pretty similar to what they have been in a "normal year," with 5 cents per 1% of moisture pretty much covering it, with some locations bumping that up for very high moisture corn in addition to the typical shrink schedule. Of course, some locations do not have dryers or have limited drying capacity so it's all subject to how much room they have for wet corn as well," said Wagner. "Test weights have been mostly in the 50 to 54 lbs./bu range dry here, with a few really late planted acres coming in around 48 lbs./bu. The test weight discounts are really all over the board; ethanol plant discounts of 1 cent per 1/2 lb. under 54 lbs. have been pretty typical, with a steeper discount of 2 cents per 1/2 lb. under 50 lbs. if they will take it. Shuttle loader terminals are more punitive with 3 cents to 5 cents per 1/2 lb. from 50 to 54 lbs. and are more likely to have zero wiggle room on rejecting sub 50 lb. corn. I have heard some pretty bad horror stories farther north, but around here, I haven't heard of anyone who hasn't been able to find a home for corn. I'm guessing it probably helps that we have a strong ethanol demand pull coming from our south due to all the prevented planting in southeast South Dakota," added Wagner. Tim Luken, manager Oahe Grain in Onida, South Dakota told me, "Corn harvest started the 24th of October and we dumped corn still on the 27th of December. I am sure we will be dumping new-crop corn every week until spring if they can get to it. We have dumped 1.7 million bushels and average moisture was 19.2%, with average test weight at 53.5 lbs./bu. Needless to say, I am very pleased with the test weight." Luken said that they dried 100% of their new-crop corn and was glad they used natural gas and did not have to deal with the propane shortages. "The early corn harvested late October through middle part of November was in the 52.5 to 56 lbs./bu range, but as the calendar clicked by, the test weight went down into the 48.5 to 50 lb. range. Fortunately, we have an outlet for light test weight corn to local and statewide ethanol plants. The recent major snowstorm that dumped 12 to 14 inches of snow, if not more, has shut things down for a while. Hats off to my employees who have done an outstanding job of dealing with Mother Nature," added Luken. "As far as harvest conditions go, we were very fortunate compared to some," said Kenny Reinke, Neligh, Nebraska. "We are used to running in snow so that wasn't anything more than an annoyance to us. One thing we are not used to having to deal with is wet soil conditions. I'm still fighting wet soil conditions in one field from spring that we couldn't get all planted. Luckily, the combine didn't get stuck, but we had a couple close calls. "After wrapping up bean harvest, we started in on corn Oct. 16, which is a pretty average date for us, but the corn was easily 3 to 4 points wetter than we are used to. Our normal harvest moisture is 15% to 18%. Luckily, the delayed harvest meant there were opportunities out there also. The first field was taken out wet to take advantage of a drying incentive program for a local elevator so they could have enough non-GMO corn on hand to ship. On the opposite end of the spectrum, you also really had to shop around on the drying changes. Some were as high as 6 cents a point to a more normal rate of 3 cents per point. "After delivering the wet corn the elevator wanted for the program, I sat for 7 to 10 days waiting and hoping the corn would still dry down some. Corn had a very long delayed black layer fill, which caused some of it to be damaged slightly from the frost. This definitely caused some of our dry down and test weight issues. We stayed consistently in the 20 to 17.5 moisture levels all the way through harvest. "We are traditionally a field drying area, which makes years like this a challenge. Thankfully, the elevators really increased drying capacity since 2009. This doesn't solve the problem of on-farm storage though. This delayed harvest left many area farmers waiting for corn to dry enough to be bin stored. The quality of the grain was very noticeable this year; in a bad way. Increased fines (material smaller than whole corn kernels) have been very noticeable this year in the stored grain. The later harvest also means less opportunity to capture quality fan drying days while the corn is bin stored. "On average, our test weights are down 1.5 to 2 lbs./bu," said Reinke. "They varied from 60 to 54 lbs./bu and no doubt this won't help the stored corn. Our yields came in right in line with farm averages, which is good considering the year we went through. Year-over-year yields are down dramatically but 2018 was also an exceptional year. It's going to be interesting to see how the higher moisture and lower test weight affect the disappearance of the crop." Randy Uhrmacher, Hastings, Nebraska, said his harvest started a little later than normal this year as the crops wouldn't dry down as he would have liked them to. "We did get a hard-killing freeze followed by about a week of warmer windy weather that changed all of that. At that point, everything dried very well. We did have a couple of snow delays, but they were short lived and we finished the first part of November. Yields were off from the last couple of years, but about like expected after the challenging year we had. Just too many bad days for record crop yields." "We started corn on Oct. 23," said Quentin Connealy, Tekamah, Nebraska. "When we started out, the corn was a touch wet, but not bad considering the year. It was 18.5% to 19% when we started and hauled most of it to the elevator since we don't have a drying bin. Once the corn got under 18%, we started putting it in the bin. "We got our corn planted fairly good on timing, so we didn't have much drying issues like other areas. Test weights were all solid to ranging from 58 to 61 lbs. across the board. We are mostly irrigated so that helped keep our test weights up along with some late rains. Yields were pretty good but figuring down 5% to 10% from last year. Similar to beans, we were happy with all our corn that stayed above floodwaters. I lost 290 acres of my April 23 planted corn, so that was especially sad. We finished harvest Nov. 22 with some great help from our neighbor Tim Gregerson, who brought his combine over to run along with us. It felt like a long harvest, but overall went fairly smooth, and we were sure glad to be done before Thanksgiving." LATE HARVEST CAUSES DOMINO EFFECT "Farmers who harvested wet corn and were unable to dry it down all the way before storing it will have to keep a sharp eye on their bins this winter. It was hard to weigh the risk of leaving the corn in the field against putting it in the bin too wet. It's going to be interesting come next spring as temperatures start to warm up and then we see how well some of this grain keeps," said Reinke. Here is a link to SDSU extension discussing storing wet corn and late harvest options: https://extension.sdstate.edu/wet-corn-storage-and-late-harvest-options Backstrom noted that another issue from the late harvest they are going to be dealing with is fertilizer application, or lack thereof. "We always try to get as much nitrogen on in the fall for next year's wheat and corn, which helps take a huge burden off us for the spring. Last year we only got half done, and this year we have zero done for spring 2020. We apply NH3 by either strip-till knife or coulter. Not only will this cause a logical challenge for us on our farm, that's providing we have a decent early spring, (early to mid-April), but also since most of the country didn't get much on we will most likely be waiting for days at a time for it to show up by truck." Here is a link to more info on strip-till from UNL: https://cropwatch.unl.edu/tillage/striptill "One caveat from 2019 is that there could potentially be a lot of prevented planting next year in parts of the country that were already fully saturated before the September rains and October snow," added Backstrom. "In addition, some places in North Dakota have already had as much as their annual snowfall as well." Brandt agreed. "As wet as we are and lots of snow, (well over 40 inches for the season already) with lots of unharvested crop, every elevator and agronomy company fears we may see more prevented planting acres in 2020." "Prevented planting paid well in 2019," according to Brandt. "You're done harvesting and all your equipment is put away." Perhaps one of the worst things coming out of 2019 in parts of the Upper Midwest is that some farmers may have to stop farming in areas where nearly all their crops were affected by poor weather events in 2019. "We've had three farms in our area announce they were done," said Krueger. "I suspect this number may increase as we get into renewal season and farmers start meeting with their lenders. It's not a great environment to be in. Lenders are stressed. Farmers are stressed." Krueger added, "Salesman and companies for inputs in 2020 are trying to get growers to commit, but there's so much in the air yet." Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** DTN Weekly Average DDG Price Steady OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average spot price from the 40 locations DTN contacted was unchanged at $150 per ton for the week ended Jan. 2. Prices have been steady during the holiday break as cash corn prices have been mostly unchanged overall. Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Jan. 2 was at 107.28%. The value of DDG relative to soybean meal was at 49.90%. The cost per unit of protein for DDG was $5.56, compared to the cost per unit of protein for soybean meal at $6.33. In its weekly export DDGS update, the U.S. Grains Council noted, "DDGS markets are quiet this week with the New Year's holiday dampening trading activity. Merchandisers report that between the holiday, staff vacations, and no significant logistics issues, markets are thinly traded and prices are mostly in-line with the prior two week's values. Indications for January DDGS FOB NOLA are steady while offers for February and March are down $1/MT from last week. Conversely, prices for 40-foot containers to Southeast Asia are up $1/MT for deferred months, while spot values are unchanged at $246/MT." * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans) * FOB (free on board means buyer pays costs of ocean freight, insurance, unloading, and transportation from originating port) ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE COMPANY STATE 1/2/2020 12/19/2019 Bartlett and Company, Kansas City, MO (816-753-6300) Missouri Dry $165 $165 $0 Wet $83 $83 $0 Show Me Ethanol LLC, Carrollton, MO (660-542-6493) Missouri Dry $165 $165 $0 Wet $80 $80 $0 CHS, Minneapolis, MN (800-769-1066) Illinois Dry $155 $145 $10 Indiana Dry $150 $150 $0 Iowa Dry $140 $140 $0 Michigan Dry $145 $150 -$5 Minnesota Dry $140 $140 $0 North Dakota Dry $145 $145 $0 New York Dry $155 $155 $0 South Dakota Dry $140 $140 $0 MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) Kansas Dry $160 $160 $0 POET Nutrition, Sioux Falls, SD (888-327-8799) Indiana Dry $155 $155 $0 Iowa Dry $140 $142 -$2 Michigan Dry $145 $145 $0 Minnesota Dry $139 $140 -$1 Missouri Dry $158 $160 -$2 Ohio Dry $160 $155 $5 South Dakota Dry $158 $152 $6 United BioEnergy, Wichita, KS (316-616-3521) Kansas Dry $165 $165 $0 Wet $65 $65 $0 Illinois FEB Dry $160 $155 $5 Nebraska Dry $160 $160 $0 Wet $65 $65 $0 U.S. Commodities, Minneapolis, MN (888-293-1640) Subject Illinois Dry $155 $155 $0 Subject Indiana Dry $155 $155 $0 Subject Iowa Dry $145 $145 $0 Subject Michigan Dry $150 $150 $0 Subject Minnesota Dry $140 $140 $0 Subject Nebraska Dry $165 $165 $0 Subject New York Dry $170 $170 $0 Subject North Dakota Dry $150 $150 $0 Subject Ohio Dry $160 $160 $0 Subject South Dakota Dry $140 $140 $0 Subject Wisconsin Dry $140 $140 $0 Valero Energy Corp, San Antonio Texas Indiana Dry $150 $150 $0 Iowa Dry $135 $135 $0 Minnesota Dry $135 $135 $0 Nebraska Dry $145 $145 $0 Ohio Dry $155 $155 $0 South Dakota Dry $140 $140 $0 California Dry $208 $208 $0 Western Milling, Goshen, California (559-302-1074) California Dry $216 $218 -$2 *Prices listed per ton. Weekly Average $150 $150 $0 The weekly average prices above reflect only those companies DTN collects spot prices from. States include: Missouri, Iowa, Nebraska, Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, Wisconsin and Indiana. Prices for Pennsylvania, New York and California are not included in the averages. VALUE OF DDG VS. CORN & SOYBEAN MEAL Settlement Price: Quote Date Bushel Short Ton Corn 1/2/2020 $3.9150 $139.82 Soybean Meal 1/2/2020 $300.60 DDG Weekly Average Spot Price $150.00 DDG Value Relative to: 1/2 12/19 Corn 107.28% 108.67% Soybean Meal 49.90% 50.27% Cost Per Unit of Protein: DDG $5.56 $5.56 Soybean Meal $6.33 $6.28 Notes: Corn and soybean prices take from DTN Market Quotes. DDG price represents the average spot price from Midwest companies collected on Thursday afternoons. Soybean meal cost per unit of protein is cost per ton divided by 47.5. DDG cost per unit of protein is cost per ton divided by 27. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** FDA Inspections on the Rise to Ensure Facilities are FSMA Compliant The Food Safety Modernization Act (FSMA) includes a rule called the "Sanitary Transportation of Human and Animal Food," which was created to protect foods from farm to table by keeping them safe from contamination during transportation. National Grain and Feed Association (NGFA) Senior Vice President of Feed Services David Fairfield spoke at the Nebraska Grain and Feed Association winter meeting on Dec. 17 about FSMA inspections and reviewed the Sanitary Transportation rule, clarifying the requirements for ag related businesses. As a reminder, the rule establishes requirements for shippers, loaders, carriers by motor or rail vehicle, and receivers involved in transporting human and animal food to use sanitary practices to ensure the safety of that food. According to the FDA, the requirements do not apply to transportation by ship or air because of limitations in the law. FDA's final rule largely exempts rail carriers and truckers from the rule's requirements unless the shipper and carrier have a written agreement (e.g., contractual arrangement) making the carrier or another party responsible, in whole or in part, for sanitary conditions during the transportation operation. The rule defines a "carrier" to mean "a person who physically moves food by rail or motor vehicle in commerce within the United States," excluding persons who transport food while operating as a parcel delivery service. Exemptions from the Sanitary Transportation of Human and Animal Food rule include: -- Shippers, receivers, or carriers engaged in food transportation operations that have less than $500,000 in average annual revenue. -- Transportation activities performed by a farm. -- Transportation of food that is transshipped through the United States to another country. -- Transportation of food that is imported for future export and that is neither consumed or distributed in the United States. -- Transportation of compressed food gases (e.g. carbon dioxide, nitrogen or oxygen authorized for use in food and beverage products) and food contact substances. -- Transportation of human food byproducts transported for use as animal food without further processing. -- Transportation of food that is completely enclosed by a container except a food that requires temperature control for safety. -- Transportation of live food animals, except molluscan shellfish. "The most responsible party for enduring the safety of food transportation is the shipper," said Fairfield. "Shippers, loaders, carriers and receivers all need to comply." Fairfield also noted that many companies are asking about prior loads before loading an empty vehicle -- a good practice to follow. Fairfield noted that while compliance dates have passed for this rule, FDA is inspecting more facilities than they have in the past. FDA inspections will encompass all the FSMA rules your facility is expected to comply with and can last four to five days. Fairfield also noted that FSMA compliance inspections are expected to increase in 2020. "Facility managers should be familiar with the regulations and how they apply to their operation. They should train the appropriate employees, develop programs that demonstrate compliance, including record keeping and have an inspection plan in place," said Fairfield. "A comprehensive plan to prepare for an inspection should address the potential scope of the inspection, questions an FDA inspector may ask and guidelines on handling record requests." Fairfield said it is very important for facilities to establish and maintain required records. "All of the FSMA rules have provisions that specifically require certain procedures and activities to be documented. The FDA has the right to access, review and copy any required record. Having all of these required records in place is essential for a facility to demonstrate compliance. Facilities should include in their inspection plans which records the investigator would be allowed to access and copy." Below are links to the FSMA rules and a link to the NGFA guidance for FDA inspections. Link to information about Sanitary Transportation of Human and Animal Food rule: https://www.fda.gov/food/food-safety-modernization-act-fsma/key-changes-fsma-fin al-rule-sanitary-transportation-human-and-animal-food Link to information about the FSMA: https://www.fda.gov/food/guidance-regulation-food-and-dietary-supplements/food-s afety-modernization-act-fsma Link to NGFA guide "Rights and Obligations During FDA Inspections": https://www.ngfa.org/news/feed-news/ngfa-unveils-new-guide-rights-obligations-fd a-inspections/ Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ****************************************************************************** DTN Weekly Average DDG Price Stronger OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average spot price from the 40 locations DTN contacted was up $5 at $150 per ton for the week ended Dec. 19. Prices jumped higher as buyers have been securing their December needs ahead of the holidays, causing some locations to be short on spot product. The Energy Information Administration noted in their weekly supply report that ethanol supply in the U.S. was unchanged at 21.8 million barrels (bbl) for the week ended Dec. 13, according to data released Wednesday morning. Blending demand was up a sharp 6.3% on the week while plant production eased. Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Dec. 19 was at 108.67%. The value of DDG relative to soybean meal was at 50.27%. The cost per unit of protein for DDG was $5.56, compared to the cost per unit of protein for soybean meal at $6.28. In its weekly export DDGS update, the U.S. Grains Council noted, "The U.S. DDGS market is mixed this week with Barge CIF NOLA and FOB Gulf values firmer while rail-delivered rates are down $2 per metric ton (mt). Merchandisers are reporting the forward curve for DDGS has flattened versus last week. FOB NOLA offers average $216/mt for January shipment while the average price for 40-foot containers to Southeast Asia stands at $246/mt. Buyers in Indonesia and the Philippines remain active, with offers for containerized shipments to those countries up $2-$3/mt this week." Containers trying to make their way to the Gulf are experiencing slowdowns along the way. The St. Louis harbor was closed for a few days this past week after a barge fleet broke away during a winter storm. American Commercial Barge Line noted Dec. 19 that tow sizes are reduced on the Lower Mississippi River with southbound tows cut back by a string of barges (five) due to high river levels. * CIF (cost, insurance and freight paid by seller) NOLA (New Orleans) * FOB (free on board means buyer pays costs of ocean freight, insurance, unloading, and transportation from originating port) ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE COMPANY STATE 12/19/2019 12/12/2019 Bartlett and Company, Kansas City, MO (816-753-6300) Missouri Dry $165 $162 $3 Wet $83 $81 $2 Show Me Ethanol LLC, Carrollton, MO (660-542-6493) Missouri Dry $165 $165 $0 Wet $80 $80 $0 CHS, Minneapolis, MN (800-769-1066) Illinois Dry $145 $135 $10 Indiana Dry $150 $140 $10 Iowa Dry $140 $135 $5 Michigan Dry $150 $150 $0 Minnesota Dry $140 $135 $5 North Dakota Dry $145 $135 $10 New York Dry $155 $155 $0 South Dakota Dry $140 $125 $15 MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) Kansas Dry $160 $160 $0 POET Nutrition, Sioux Falls, SD (888-327-8799) Indiana Dry $155 $150 $5 Iowa Dry $142 $142 $0 Michigan Dry $145 $135 $10 Minnesota Dry $140 $140 $0 Missouri Dry $160 $160 $0 Ohio Dry $155 $150 $5 South Dakota Dry $152 $150 $2 United BioEnergy, Wichita, KS (316-616-3521) Kansas Dry $165 $150 $15 Wet $65 $55 $10 Illinois/FEB Dry $155 $153 $2 Nebraska Dry $160 $150 $10 Wet $65 $60 $5 U.S. Commodities, Minneapolis, MN (888-293-1640) Illinois Dry $155 $150 $5 Indiana Dry $155 $150 $5 Iowa Dry $145 $140 $5 Michigan Dry $150 $145 $5 Minnesota Dry $140 $135 $5 Nebraska Dry $165 $160 $5 New York Dry $170 $165 $5 North Dakota Dry $150 $145 $5 Ohio Dry $160 $155 $5 South Dakota Dry $140 $135 $5 Wisconsin Dry $140 $135 $5 Valero Energy Corp, San Antonio Texas Indiana Dry $150 $150 $0 Iowa Dry $135 $135 $0 Minnesota Dry $135 $135 $0 Nebraska Dry $145 $145 $0 Ohio Dry $155 $155 $0 South Dakota Dry $140 $140 $0 California Dry $208 $208 $0 Western Milling, Goshen, California (559-302-1074) California Dry $218 $215 $3 *Prices listed per ton. Weekly Average $150 $145 $5 The weekly average prices above reflect only those companies DTN collects spot prices from. States include: Missouri, Iowa, Nebraska, Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, Wisconsin and Indiana. Prices for Pennsylvania, New York and California are not included in the averages. ** VALUE OF DDG VS. CORN & SOYBEAN MEAL Settlement Price: Quote Date Bushel Short Ton Corn 12/19/2019 $3.8650 $138.04 Soybean Meal 12/19/2019 $298.40 DDG Weekly Average Spot Price $150.00 DDG Value Relative to: 12/19 12/12 Corn 108.67% 110.85% Soybean Meal 50.27% 49.06% Cost Per Unit of Protein: DDG $5.56 $5.37 Soybean Meal $6.28 $6.22 Notes: Corn and soybean prices take from DTN Market Quotes. DDG price represents the average spot price from Midwest companies collected on Thursday afternoons. Soybean meal cost per unit of protein is cost per ton divided by 47.5. DDG cost per unit of protein is cost per ton divided by 27. Mary Kennedy can be reached at mary.kennedy@dtn.com Follow her on Twitter @MaryCKenn ******************************************************************************

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