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Market Matters Blog           02/24 11:37
2019 River Shipping Season Disappointing as Flooding Took Its Toll
DTN Weekly Average DDG Price Unchanged
DTN Weekly Average DDG Price Steady
DTN Weekly Average DDG Price Slightly Lower
DTN Weekly Average DDG Price Lower
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 River Shipping Season Disappointing as Flooding Took Its Toll

   The start of the 2019 navigation season in the Upper Mississippi River (UMR) 
was late and drawn out. The first tow didn't make it to St. Paul, Minnesota, 
until April 24, 2019, when Motor Vessel Aaron F. Barrett, pushing 12 barges, 
finally locked through Lock and Dam 2 near Hastings on that date. The average 
date for the first tow to reach St. Paul is around March 18, but historic 
flooding and ensuing lock closures downriver kept most of the UMR closed on and 
off for months.

   After MV Barrett arrived, St. Paul would not see another tow for more than 
three weeks on May 20. Besides the Mississippi River in St. Paul sitting in 
flood stage for 42 days through May 7, 2019, there were also lock closures in 
the Rock Island District during that time, stopping any vessels from coming 
upriver.

   When barges were finally able to make their way into the UMR in late summer, 
the delayed corn and soybean harvest left hundreds of barges parked along the 
Mississippi River in St. Paul from early fall through November, with most of 
them moving back downriver empty ahead of the winter closure.

   The St. Paul District Corps reported the last tow of the season, Motor 
Vessel Kelly Rae Erickson, departed St. Paul, Minnesota, Thursday, Nov. 28, 
"bookmarking" a challenging navigation season. 

   Jim Rand, St. Paul District locks and dams chief, noted that the 2019 
shipping season was one of the more challenging seasons the district has had in 
a while. 

   "We had a really late start due to Mother Nature and fought high water much 
of the summer," he said.

   On Feb. 5, 2020, the United States Army Corps of Engineers (USACE) released 
the 2019 navigation lockages at Lock and Dam 10, for the Upper Mississippi 
River. 

   "During the 2019 season, Corps staff supported 1,750 commercial navigation 
lockages at Lock and Dam 10, near Guttenberg, Iowa, which was below the 10-year 
average of 2,164. The 2019 lockages supported 11,575,625 tons of commodities by 
the navigation industry. During the 2018 season, Corps staff supported 2,369 
commercial lockages and the movement of 15,789,297 tons of commodities," noted 
the Corps.

   USDA reported low volumes for barged grain in their Synopsis of Agricultural 
Transportation in 2019.

   "From late 2018 through August 2019, poor navigation conditions due to 
flooding slowed barge traffic, particularly through the locking portions of the 
Mississippi River," USDA said. "By August, the flooding was replaced by a rapid 
drop in water levels, causing low water and shoaling." 

   In late August 2019, USDA noted in their weekly Grain Transportation Report 
that the navigational issues, combined with recent high barge shipping rates 
and a low supply of barges upriver, decreased the number of grain barges and 
volume of grain transiting the locks above St. Louis.

   "Although volumes recovered in November and December, the yearly total for 
barged grain was 23% lower than in 2018 and 28% lower than the average of the 
previous three years, mainly as a result of low volumes of barged corn," added 
USDA.

   The persistent flooding had an impact on cash basis in the spring and summer 
of 2019, especially corn. The DTN national average basis for corn was hovering 
around the five-year average for the first part of 2019 until it spiked in late 
June when the UMR locks finally opened up. Then, at the end of August, it 
finished the 2018-19 crop year 17 cents above the DTN five-year maximum 
average. 

   Besides barges stalled trying to head north or south in the spring and early 
summer, many farmers were unable to haul their grain to river terminals in 
areas where their yards and farms were flooded and road or rail access was 
blocked. 

   START OF 2020 NAVIGATION NEAR, BUT FLOODING PERSISTS IN LOWER MISSISSIPPI

   The USACE St. Paul District started their 2020 ice measurements on Lake 
Pepin Feb. 19, finding an average of 17 feet at the thickest spots. The team 
measures at one-mile intervals and follows the main course that the navigation 
industry uses. Tows can push barges though 10 to 12 inches of ice, and with 
warmer weather descending on the Upper Midwest, we may see an early open this 
year.

   Lake Pepin is the largest lake on the entire Mississippi at 21 miles long. 
It starts south of Red Wing, Minnesota, and extends to Reads Landing near 
Wabasha. The lake is the last hurdle tows face for the opening of the spring 
shipping season. Lake Pepin is a part of Pool 4, which extends from Lock and 
Dam 3 near Red Wing, Minnesota, down to Lock and Dam 4 at Alma, Wisconsin.

   Farther downstream past St. Louis, flood conditions on the Lower Mississippi 
River (LMR) are causing delays for northbound and southbound barges. 

   American Commercial Barge Line (ACBL) said, "Levels are in flood stage from 
Cairo to the Gulf, driving a 5-10 barge Tow Size reduction, or a 14-24% 
reduction in productivity. Furthermore, daylight restrictions in Memphis, 
Vicksburg, and Baton Rouge are increasing transits by as much as two days or 
40%." 

   On Feb. 22, National Oceanic and Atmospheric Administration (NOAA) issued a 
forecast for the LMR and noted that major flooding has occurred or is forecast. 
One of the worst spots is currently at Baton Rouge, Louisiana, which, in 2019, 
was in flood stage on Jan. 6 and stayed above flood stage for a record 211 
consecutive days. On Feb. 24, 2020, the river there is just hovering above 
major flood stage at 40.54 feet and is not expected to crest until around March 
4 at 41 feet. https://www.weather.gov/lmrfc/ 

   ACBL added, "If additional rain continues in March, we could be headed for 
an extended flood situation similar to 2019." 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly Average DDG Price Unchanged

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was unchanged on average at $147 per ton 
for the week ended Feb. 20. Cash corn prices remain high and DDG value to corn 
and soymeal is still above average.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Feb. 20 was at 108.74%. The value of DDG relative to 
soybean meal was at 50.19%. The cost per unit of protein for DDG was $5.44, 
compared to the cost per unit of protein for soybean meal at $6.17. 

   The Energy Information Administration reported Thursday morning that ethanol 
inventory was higher for the week ended Feb. 14. Plant production was up nearly 
1%, while demand rose to the highest level since late December 2019.

   In its weekly DDGS export update, the U.S. Grains Council noted: "DDGS 
markets are firmer this week with demand increasing for various destination 
markets. Merchandisers are reporting a 'decent amount' of export sales in the 
past few days. That has supported DDGS values across the board. Barge CIF NOLA 
values are $2 per metric ton (mt) higher, while FOB Gulf offers are up $5/mt 
for March/April/May positions. U.S. rail rates have firmed again following last 
week's weakness and are $2-$3/mt higher. Offers for 40-foot containers to Asia 
are mostly higher with rates to Vietnam, Japan, and Myanmar up $2-$3/mt, while 
prices for product to Thailand and Indonesia are down slightly after rising 
last week. The average offer for containers to Southeast Asia is unchanged from 
last week at $253/mt for March shipment and $250/mt for April." 

   Some of the strength in Gulf prices comes from cheaper barge freight, but 
also due to flooding slowing barges heading south. The Lower Mississippi River 
(LMR) is still in flood stage, which is causing delays all the way down to and 
in the Gulf. The river at Baton Rouge is at 38.84 feet (flood stage is 35 feet) 
and is expected to remain above flood stage, possibly through March. This is 
not good news given that we have yet to have snowmelt from the North, but 
plenty of rain has been falling in the South, causing the flooding.

   * 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                           2/20/2020      2/13/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri                Dry        $160          $157         $3
                                    Wet        $80            $79         $1
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
            Missouri                Dry        $155          $155         $0
                                    Wet        $80            $80         $0
CHS, Minneapolis, MN (800-769-1066)
subject     Illinois                Dry        $155          $155         $0
subject     Indiana                 Dry        $150          $150         $0
subject     Iowa                    Dry        $140          $140         $0
subject     Michigan                Dry        $148          $148         $0
subject     Minnesota               Dry        $145          $145         $0
subject     North Dakota            Dry        $135          $135         $0
subject     New York                Dry        $155          $155         $0
subject     South Dakota            Dry        $135          $135         $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas                  Dry        $148          $148         $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana                 Dry        $155          $155         $0
            Iowa                    Dry        $138          $140        -$2
            Michigan                Dry        $150          $150         $0
            Minnesota               Dry        $138          $138         $0
            Missouri                Dry        $155          $155         $0
            Ohio                    Dry        $160          $160         $0
            South Dakota            Dry        $145          $148        -$3
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas                  Dry        $145          $150        -$5
                                    Wet        $50            $55        -$5
            Illinois MARCH          Dry        $160          $162        -$2
            Nebraska                Dry        $145          $150        -$5
                                    Wet        $45            $50        -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois                Dry        $155          $152         $3
            Indiana                 Dry        $155          $155         $0
            Iowa                    Dry        $140          $140         $0
            Michigan                Dry        $155          $150         $5
            Minnesota               Dry        $140          $140         $0
            Nebraska                Dry        $135          $135         $0
            New York                Dry        $160          $160         $0
            North Dakota            Dry        $145          $145         $0
            Ohio                    Dry        $160          $160         $0
            South Dakota            Dry        $140          $140         $0
            Wisconsin               Dry        $143          $143         $0
Valero Energy Corp, San Antonio Texas
            Indiana                 Dry        $150          $150         $0
            Iowa                    Dry        $140          $140         $0
            Minnesota               Dry        $135          $135         $0
            Nebraska                Dry        $145          $145         $0
            Ohio                    Dry        $160          $160         $0
            South Dakota            Dry        $140          $140         $0
            California              Dry        $198          $198         $0
Western Milling, Goshen, California (559-302-1074)
            California              Dry        $210          $207         $3
*Prices listed per ton.
            Weekly Average                     $147          $147         $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      2/20/2020   $3.7850      $135.18
                             Soybean Meal      2/20/2020   $292.90
            DDG Weekly Average Spot Price        $147.00
                                  DDG Value Relative to:   2/20        2/14
                                                    Corn   108.74%      108.46%
                                            Soybean Meal    50.19%       50.36%
                               Cost Per Unit of Protein:
                                                     DDG     $5.44        $5.44
                                            Soybean Meal     $6.17        $6.15
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

******************************************************************************
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 on average at $147 per ton 
for the week ended Feb. 13. Demand remains flat for this time of year and the 
extreme cold that set in through parts of the Midwest this week is not expected 
to last long.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Feb. 13 was at 108.46%. The value of DDG relative to 
soybean meal was at 50.36%. The cost per unit of protein for DDG was $5.44, 
compared to the cost per unit of protein for soybean meal at $6.15. 

   The Energy Information Administration on Wednesday morning noted that 
domestic ethanol inventory increased in the week ended Feb. 7 as production 
fell for the third time in four weeks, down over 4%, while demand dropped about 
2%.

   In its weekly DDGS export update the U.S. Grains Council noted, "DDGS 
markets are higher this week with Barge CIF NOLA and FOB NOLA offers up $1 to 
$2 per metric ton (mt) while U.S. rail rates are steady following last week's 
increases. Asian demand is strengthening with buyers validating higher asking 
prices. Prices for 40-foot containers to Thailand and Vietnam are up $5 to 
$6/mt for spot shipment while April positions have posted smaller gains. 
Containers destined for Southeast Asia are up $5/mt this week, averaging 
$252/mt. 

   DDGS prices for rail delivered Chicago have been stronger due to container 
shortages in Chicago, imposing a premium for nearby deliveries and pressuring 
the deferred deliveries, as the market sees product stuck in rail yards, 
according to S&P Global Platts. This is due to significant delays in the 
delivery of containers into the U.S. as container vessels have been idled 
outside Chinese ports following the coronavirus outbreak.

   * 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       CURRENT     CHANGE
COMPANY      STATE                           2/13/2020      2/6/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
             Missouri                Dry        $157          $155        $2
                                     Wet        $79           $78         $1
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
             Missouri                Dry        $150          $150        $0
                                     Wet        $78           $78         $0
CHS, Minneapolis, MN (800-769-1066)
             Illinois                Dry        $155          $155        $0
             Indiana                 Dry        $150          $150        $0
             Iowa                    Dry        $140          $135        $5
             Michigan                Dry        $148          $145        $3
             Minnesota               Dry        $145          $135        $10
             North Dakota            Dry        $135          $140        -$5
             New York                Dry        $155          $150        $5
             South Dakota            Dry        $135          $135        $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
             Kansas                  Dry        $148          $148        $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
             Indiana                 Dry        $155          $155        $0
             Iowa                    Dry        $140          $142        -$2
             Michigan                Dry        $150          $150        $0
             Minnesota               Dry        $138          $140        -$2
             Missouri                Dry        $155          $155        $0
             Ohio                    Dry        $160          $160        $0
             South Dakota            Dry        $148          $152        -$4
United BioEnergy, Wichita, KS (316-616-3521)
             Kansas                  Dry        $150          $150        $0
                                     Wet        $55           $55         $0
             Illinois FEB            Dry        $162          $162        $0
             Nebraska                Dry        $150          $150        $0
                                     Wet        $50           $50         $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
             Illinois                Dry        $152          $152        $0
             Indiana                 Dry        $155          $155        $0
             Iowa                    Dry        $140          $140        $0
             Michigan                Dry        $150          $150        $0
             Minnesota               Dry        $140          $140        $0
             Nebraska                Dry        $135          $135        $0
             New York                Dry        $160          $160        $0
             North Dakota            Dry        $145          $145        $0
             Ohio                    Dry        $160          $160        $0
             South Dakota            Dry        $140          $140        $0
             Wisconsin               Dry        $143          $143        $0
Valero Energy Corp, San Antonio Texas
             Indiana                 Dry        $150          $150        $0
             Iowa                    Dry        $140          $140        $0
             Minnesota               Dry        $135          $140        -$5
             Nebraska                Dry        $145          $145        $0
             Ohio                    Dry        $160          $160        $0
             South Dakota            Dry        $140          $140        $0
             California              Dry        $198          $204        -$6
Western Milling, Goshen, California (559-302-1074)
             California              Dry        $207          $207        $0
*Prices listed per ton.
             Weekly Average                     $147          $147        $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      2/13/2020   $3.7950      $135.54
                             Soybean Meal      2/13/2020   $291.90
            DDG Weekly Average Spot Price        $147.00
                                  DDG Value Relative to:   2/14        2/6
                                                    Corn   108.46%      108.53%
                                            Soybean Meal    50.36%       51.00%
                               Cost Per Unit of Protein:
                                                     DDG     $5.44        $5.44
                                            Soybean Meal     $6.15        $6.07
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

******************************************************************************
DTN Weekly Average DDG Price Slightly Lower

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was down $1 on average at $147 per ton for 
the week ended Feb. 6. Prices are mixed again this week, and with the lack of 
extreme cold weather in much of the Midwest, demand has slowed.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Feb. 6 was at 108.53%. The value of DDG relative to 
soybean meal was at 51.00%. The cost per unit of protein for DDG was $5.44, 
compared to the cost per unit of protein for soybean meal at $6.07. 

   In its weekly DDGS export update the U.S. Grains Council noted, DDGS markets 
were mixed this week with Barge CIF NOLA and FOB NOLA offers softening slightly 
while U.S. rail rates are up $1 to $4 per metric ton (mt). Demand from buyers 
in Asia is increasing with noted strength in prices for 40-foot containers to 
certain destinations. In particular, values for DDGS to Thailand are up $10/mt 
for March and April shipment while offers for product to Vietnam are up $4 to 
$6/mt. On average, DDGS containers to Southeast Asia are up $3 to $4/mt for 
March and April shipment, with prices averaging $247/mt." 

   The U.S. Census Bureau said Wednesday that U.S. exports of DDGS totaled 
767,682 mt in December, down from 911,569 mt in November and down 12% from a 
year ago. Mexico was the top destination in December, taking 19% and followed 
by South Korea, Indonesia and Vietnam. For all of 2019, U.S. exports of DDGS 
were down 9% from a year ago.

   * 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                           1/6/2020     1/30/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri                Dry       $155          $160         -$5
                                    Wet       $78           $80          -$2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
            Missouri                Dry       $150          $155         -$5
                                    Wet       $78           $80          -$2
CHS, Minneapolis, MN (800-769-1066)
            Illinois                Dry       $155          $150         $5
            Indiana                 Dry       $150          $145         $5
            Iowa                    Dry       $135          $135         $0
            Michigan                Dry       $145          $140         $5
            Minnesota               Dry       $135          $135         $0
            North Dakota            Dry       $140          $140         $0
            New York                Dry       $150          $150         $0
            South Dakota            Dry       $135          $135         $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas                  Dry       $148          $148         $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana                 Dry       $155          $155         $0
            Iowa                    Dry       $142          $144         -$2
            Michigan                Dry       $150          $150         $0
            Minnesota               Dry       $140          $140         $0
            Missouri                Dry       $155          $158         -$3
            Ohio                    Dry       $160          $160         $0
            South Dakota            Dry       $152          $152         $0
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas                  Dry       $150          $155         -$5
                                    Wet       $55           $60          -$5
            Illinois FEB            Dry       $162          $162         $0
            Nebraska                Dry       $150          $155         -$5
                                    Wet       $50           $65         -$15
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois                Dry       $152          $150         $2
            Indiana                 Dry       $155          $155         $0
            Iowa                    Dry       $140          $140         $0
            Michigan                Dry       $150          $150         $0
            Minnesota               Dry       $140          $140         $0
            Nebraska                Dry       $135          $140         -$5
            New York                Dry       $160          $160         $0
            North Dakota            Dry       $145          $150         -$5
            Ohio                    Dry       $160          $160         $0
            South Dakota            Dry       $140          $140         $0
            Wisconsin               Dry       $143          $143         $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          $204         $0
Western Milling, Goshen, California (559-302-1074)
            California              Dry       $212          $212         $0
*Prices listed per ton.
            Weekly Average                    $147          $148         -$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.

   **


                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn       2/6/2020   $3.7925      $135.45
                             Soybean Meal       2/6/2020   $288.20
            DDG Weekly Average Spot Price        $147.00
                                  DDG Value Relative to:    2/6        1/30
                                                    Corn   108.53%      109.20%
                                            Soybean Meal    51.00%       50.77%
                               Cost Per Unit of Protein:
                                                     DDG     $5.44        $5.48
                                            Soybean Meal     $6.07        $6.14
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

******************************************************************************
DTN Weekly Average DDG Price Lower

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was down $2 on average at $148 per ton for 
the week ended Jan. 30. Prices began to weaken Monday, as the corn and soybean 
meal markets moved lower nearly every day so far this week.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Jan. 30 was at 109.20%. The value of DDG relative to 
soybean meal was at 50.77%. The cost per unit of protein for DDG was $5.48, 
compared to the cost per unit of protein for soybean meal at $6.14. 

   The Energy Information Administration reported Wednesday morning that, for 
the week ended Jan. 24, domestic ethanol inventory was higher for a fourth week 
even as producers slowed plant production for a second straight week, while 
blending demand continued higher.

   In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS 
markets are still quiet this week and prices are slightly lower. Better weather 
and easier logistics have allowed Barge CIF NOLA prices, as well as U.S. rail 
rates, to soften this week. FOB NOLA offers stand at $214/mt for February 
shipment while 40-foot containers to Southeast Asia are offered 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                   1/30/2020  1/23/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
                Missouri          Dry     $160        $166     -$6
                                  Wet      $80        $83      -$3
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
                Missouri          Dry     $155        $160     -$5
                                  Wet      $80        $82      -$2
CHS, Minneapolis, MN (800-769-1066)
                Illinois          Dry     $150        $155     -$5
                Indiana           Dry     $145        $150     -$5
                Iowa              Dry     $135        $140     -$5
                Michigan          Dry     $140        $145     -$5
                Minnesota         Dry     $135        $140     -$5
                North Dakota      Dry     $140        $145     -$5
                New York          Dry     $150        $155     -$5
                South Dakota      Dry     $135        $140     -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
                Kansas            Dry     $148        $155     -$7
POET Nutrition, Sioux Falls, SD (888-327-8799)
                Indiana           Dry     $155        $155      $0
                Iowa              Dry     $144        $138      $6
                Michigan          Dry     $150        $150      $0
                Minnesota         Dry     $140        $138      $2
                Missouri          Dry     $158        $158      $0
                Ohio              Dry     $160        $160      $0
                South Dakota      Dry     $152        $158     -$6
United BioEnergy, Wichita, KS (316-616-3521)
                Kansas            Dry     $155        $165     -$10
                                  Wet      $60        $65      -$5
                Illinois FEB      Dry     $162        $164     -$2
                Nebraska          Dry     $155        $160     -$5
                                  Wet      $65        $65       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois        Dry               $150    $155        -$5
Indiana         Dry               $155    $155         $0
Iowa            Dry               $140    $140         $0
Michigan        Dry               $150    $150         $0
Minnesota       Dry               $140    $140         $0
Nebraska        Dry               $140    $145        -$5
New York        Dry               $160    $160         $0
North Dakota    Dry               $150    $150         $0
Ohio            Dry               $160    $160         $0
South Dakota    Dry               $140    $140         $0
Wisconsin       Dry               $143    $143         $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    $204         $0
Western Milling, Goshen, California (559-302-1074)
                California        Dry     $212        $215     -$3
*Prices listed per ton.
                Weekly Average            $148        $150     -$2
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   1/30/2020 $3.7950   $135.54
                    Soybean Meal   1/30/2020 $291.50
   DDG Weekly Average Spot Price     $148.00
                      DDG Value Relative to:  1/30     1/23
                                        Corn 109.20%   106.68%
                                Soybean Meal  50.77%    50.18%
                   Cost Per Unit of Protein:
                                         DDG   $5.48     $5.56
                                Soybean Meal   $6.14     $6.29
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

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

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

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