Corn News

Market Matters Blog 07/13 11:29

7/13/2018 - 11:31:00

Market Matters Blog           07/13 11:29
DDG Prices Lower
Summer Storms Unkind to Farmers in Upper Midwest Region
Rain Filling Rivers
DDG Prices Continue to Move Lower
Too Much of a Good Thing? Parts of the Upper Midwest Swamped by Rain
DDG Prices Continue to Push Lower
New Bipartisan Bill Delays ELD Enforcement, Says Reforms Needed
DDG Prices Continue Downward Slide
New Crop, New Year for Winter Wheat 
DDG Prices Sharply Lower

******************************************************************************
DDG Prices Lower

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
40 locations DTN contacted was lower this week at an average of $122 per ton 
for the week ended July 12, down $4 versus two weeks ago.

   Merchandisers noted that DDG prices have come under pressure again from the 
move lower in soymeal values. Also, there is plenty of product to go around, 
and recent extreme hot temperatures added a little pressure as well to prices 
as animals don't eat as much when it is so hot. The cheaper corn price is the 
biggest culprit, because values have been shrinking thanks to the tension 
surrounding the trade war of the U.S versus China and other EU countries.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended July 12 was at 101.51%, and the value of DDG 
relative to soybean meal was at 36.59%. The cost per unit of protein for DDG 
was $4.52, compared to the cost per unit of protein for soybean meal at $7.02. 

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
prices for CIF NOLA (New Orleans, Louisiana), FOB Gulf, rail delivered PNW 
(Pacific Northwest), and rail delivered California steadied and showed slight 
increases this week. Internationally, container routes to Southeast Asia fell 
on average $5 per metric ton and merchandisers expect renewed buying interest 
soon." 


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT       PREVIOUS   CHANGE
COMPANY     STATE                              7/12/2018      6/28/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri            Dry               $130          $145      -$15
                                Modified          $65            $75      -$10
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri    Dry                    $140           $140           $0
                                Wet               $65            $65       $0
CHS, Minneapolis, MN (800-769-1066)
            Illinois            Dry               $145          $148       -$3
            Indiana             Dry               $138          $135       $3
            Iowa                Dry               $120          $115       $5
            Michigan            Dry               $135          $145      -$10
            Minnesota           Dry               $110          $110       $0
            North Dakota        Dry               $110          $115       -$5
            New York            Dry               $140          $145       -$5
            South Dakota        Dry               $110          $115       -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas              Dry               $120          $125       -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana             Dry               $140          $145       -$5
            Iowa                Dry               $105          $115      -$10
            Michigan            Dry               $140          $145       -$5
            Minnesota           Dry               $105          $115      -$10
            Missouri            Dry               $140          $145       -$5
            Ohio                Dry               $140          $140       $0
            South Dakota        Dry               $100          $115      -$15
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas              Dry               $118          $125       -$7
                                Wet               $35            $35       $0
            Illinois            Dry               $150          $150       $0
            Nebraska            Dry               $118          $125       -$7
                                Wet               $35            $35       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois            Dry               $135          $135       $0
            Indiana             Dry               $130          $130       $0
            Iowa                Dry               $115          $115       $0
            Michigan            Dry               $125          $125       $0
            Minnesota           Dry               $115          $115       $0
            Nebraska            Dry               $110          $110       $0
            New York            Dry               $135          $135       $0
            North Dakota        Dry               $110          $110       $0
            Ohio                Dry               $130          $130       $0
            South Dakota        Dry               $110          $110       $0
            Wisconsin           Dry               $130          $130       $0
Valero Energy Corp, San Antonio Texas       (210-345-3362)   (210-345-3362)
            Indiana             Dry               $133          $130       $3
            Iowa                Dry               $95           $105      -$10
            Minnesota           Dry               $100          $105       -$5
            Nebraska            Dry               $90           $105      -$15
            Ohio                Dry               $140          $140       $0
            South Dakota        Dry               $105          $110       -$5
            California                            $184          $186       -$2
Western Milling, Goshen, California (559-302-1074)
            California          Dry               $205          $210       -$5
*Prices listed per ton.
            Weekly Average                        $122          $126       -$4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      7/12/2018   $3.3650      $120.18
                             Soybean Meal      7/12/2018   $333.40
            DDG Weekly Average Spot Price        $122.00
                                  DDG Value Relative to:   6/28        6/28
                                                    Corn   101.51%      102.26%
                                            Soybean Meal    36.59%       38.02%
                               Cost Per Unit of Protein:
                                                     DDG     $4.52        $4.67
                                            Soybean Meal     $7.02        $6.98
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

******************************************************************************
Summer Storms Unkind to Farmers in Upper Midwest Region

   One year ago, on June 12, I had written about the severe drought in South 
and North Dakota that intensified as July rolled around. By that same time in 
June, much of the winter wheat in South Dakota had been either sprayed out 
after insurance zeroed it out or baled by livestock owners for feed. 

   "This year the crop was off to a great start" said Tim Luken, Manager of 
Oahe Grain in Onida, South Dakota. "With the exception of the first week of 
April blizzard, two weeks later, the temps were in the 80s, sending farmers out 
in the fields for the start of the 2018 planting season." 

   Luken noted that winter wheat came out of dormancy in "fine shape" and as 
spring wheat was planted in good time, acres were actually up from last year. 
"Producers no more than got done with spring wheat and went right into planting 
corn and behind the corn come soybeans and then sunflowers. Everything come up 
in excellent shape," said Luken. "Corn come up very uniform and very fast due 
to the warm soil temps. They say corn knee high by the Fourth of July; well let 
me tell you, how about shoulder high this year for the Fourth of July and I am 
6 foot 5 inches. I have never seen corn look so good for this part of central 
South Dakota."

   That all changed for Sully County when the great white combine paid a visit 
on June 27. That hailstorm brought heavy rain as it moved from northwest of 
Sully County and was five- to 10-miles wide as it moved southeast, taking 
everything out along an 80-mile swath. Then, on June 29, the white combine 
returned as if it wanted to finish the job. Hail hit between Onida and 
Gettysburg, and west of Agar to 20 to 30 miles east and was three to five miles 
wide. On July 1, the National Weather Service in Aberdeen said the June 29 
storm was a "supercell thunderstorm" that moved through portions of Wyoming and 
South Dakota and traveled over 420 miles.

   "Cornfields are stripped down to just ankle-high stalk, and wheat fields and 
grass ditches look like summer fallow," said Luken. "One farmer lost 15,000 
acres of 40,000 planted. I talked to one farmer who lost 20 quarters of his 
crop and I also know of some farmers that lost 100% of everything. If I had to 
put a guess to how much we have lost just in Sully County, I would say at least 
30% of the county was affected. Wheat in that county went from bales to hail, a 
second year of loss. Many thousands of acres equals many millions of bushels 
that will be lost for area farmers and grain elevators to handle this marketing 
year."

   Farmers in central Nebraska suffered more than one hailstorm this summer as 
well, with the storm on June 30 producing up to golf ball-size hail in a swath 
up to 3 1/2 miles wide from Arapahoe to south of Bertrand to east of Loomis. 
Andrew Philips, in Loomis, Nebraska, had hail on 750 acres. "Pending insurance 
adjustments, not sure what they will zero out, but from the looks of it, I 
think they will zero them. We had 320 acres of irrigated corn and 430 acres of 
irrigated soybeans. We did not lose our entire 2018 crop, but it took about 1/4 
of our acres that were looking really good and close to tasseling. We had 3.50 
inches of rain and pea- to golf-ball size hail along with 60 plus miles per 
hour winds in amount of 30 to 45 minutes."

   "On May 29 there was spotty hail, with one of my fields getting the ground 
covered," said Wayne Martin who farms in Pottawattamie and Shelby counties in 
southwest Iowa. "Some corn was severely damaged, and at another farm where I 
had beans got bad hail too. Three weeks later that corn looked fairly good, but 
I lost 25% stand in places. Beans were still quite uneven in size. Bean 
population is down to 70,000 in places. 

   "On top of that, we received 13 inches of rain in June, most of it last 
half. On June 28, we had a storm that produced 70 plus miles per hour winds, 
causing green snap in the corn. Some areas saw 70% to 97%; my hailed corn has 
up to 80% snap in some areas. More wind on the night of July 4 did some more 
damage on weak corn stalks. Now we are also seeing Japanese beetles exploding 
in beans, with some leaves totally defoliated. Beans are yellowing in low 
ground and high clay side hills from too much rain." 

   RAIN SOAKED FIELDS TRYING TO DRY OUT

   Adam Ramthun, Manson, Iowa, said they got 2 to 3 inches of rain on July 4 
and 1 to 2 inches June 30 and July 1. Other locations near him saw 4.5 inches 
since June 30 and 15 inches since June 11. "I was able to get out and get a 
majority of the soybean spraying done before the June 30 rain and also 
replanted to the low spots in a few fields," said Ramthun. "Those replants have 
all but been drown out again and lost. I have not been out looking for diseases 
in the corn or beans and have not heard of any big pressure in our area. Most 
of the first-planted corn is beginning to tassel in the area. A couple fields 
have lost a lot of nitrogen, and I am hoping to have a custom applicator add 
some when it dries off." 

   "In my almost 41 years of existence I have never seen water standing like 
this," wrote Jesse Fast in Delft, Minnesota, on a June 21 Twitter post. In his 
daily weather blog, Minneapolis-St. Paul meteorologist Paul Douglas noted on 
June 26, that according to the National Oceanic and Atmospheric Administration 
(NOAA), the Minnesota average June rainfall is roughly 4 inches. "Some sections 
of southwest and southcentral Minnesota and northwest Wisconsin have picked up 
three times the average amount of moisture in the last 30 days, with southern 
Minnesota receiving up to three months' worth of rain in that timeframe," said 
Douglas.

   On July 5, Fast told me that, "Fortunately we missed the rain over the 
weekend and only ended up with .3. It's still a mess with a lot of stuck 
sprayers and yellow corn. The first of some replants started today but most 
growers are saying it's too late for the beans and are just going to leave the 
drown outs. The water hasn't gone away in many holes from the rain three weeks 
ago yet."

   On July 5, Minnesota Governor Mark Dayton signed an Emergency Executive 
Order 18-11, proclaiming a State of Peacetime Emergency in numerous Minnesota 
communities that have been impacted by significant torrential rains, flash 
flooding, high winds and tornadoes. 

   Here is the link to the order and counties involved: 
https://mn.gov/governor/newsroom/#/detail/appId/1/id/345615 

   Justin Doerr, Plainview, Nebraska, said on July 5 that in his area, the rain 
was actually a blessing. "Sure, we have areas that are drowning out and other 
areas we couldn't plant, but the majority of the fields look great. Typically 
by now, irrigation systems are running hard, but ours hasn't moved all year. It 
has only been here lately that we've been catching hail/wind damage in the 
area. Except for some isolated spots, the hail has been light and crops are 
looking great. So far, pest pressure has been low, but disease is starting to 
show up in some areas. I would say weed control is our number one issue. With 
the frequency of rain, we've had only a few opportunities to be in the field. 
Many farmers in the area are dealing with excessive volunteer corn. This is due 
to the large wind event we had last fall that laid several fields over."

   Dave Newby of Bondurant, Iowa, told me on July 5 that after the 6.5 to 8 
inches of rain on his fields at the end of June, the main problem he saw in the 
corn is grey leaf spot. "We have decided to use fungicide by airplane, but it 
was a tough call with the plunging corn price. Not generally an overabundance 
of it now, but we want to stay ahead of it. We have stripped leaves from a hail 
event, so disease has a little easier time of getting started. We're going to 
try for 200 bushels per acre (bpa) yet with the fungicide, but we might just 
get 180 bpa if the N runs out.

   "We have had some northern corn leaf blight in past years, but I can't say 
there is a problem with that this year. Corn seems to have gotten established 
ahead of the rain a little better than the soybeans. I have concerns about 
losing too much nitrogen before the ear fills. Most of the corn looks dark 
green, but you can see yellowing and die back in the low spots starting to 
occur," Newby said.

   "The soybeans generally look good where they are not drowned or water 
stressed. Seeing a few Japanese beetles and there's a little more feeding than 
I'd like to see, but not enough to reach the economic threshold yet. We treat 
our beans with Ilevo on the seed, which helps with soybean cyst nematodes and 
sudden death syndrome. The beans are not growing very fast though. The soil is 
too saturated, and there is not enough oxygen present for optimal growth. About 
10% of our beans are drowned out or severely compromised. We were shooting for 
75 bpa. I would say 60 bpa would be a more realistic goal now."

   This comment from Newby likely rings true with farmers already stricken by 
severe weather events: "Hopefully, the worst is about over, but it could be a 
long summer."

   Let's hope the great white combine is out of commission for the rest of 2018 
and that the constant, extreme rain events are over. 

   Here is a link to the National Weather Service precipitation map for June 
across the Upper Midwest Regions:

   https://twitter.com/NWSTwinCities/status/1013544279325794310 

   Here is a link to the National Weather Service Aberdeen, SD showing a map of 
the second "hail scar" left behind on June 29 after one on June 27: 
https://twitter.com/NWSAberdeen/status/1013550313637154817 

   Here is a link to the National Weather Service Hastings, NE showing a map of 
June 30th hail damage north/west of Holdrege NE: 
https://twitter.com/NWSHastings/status/1015663608641056768 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
Rain Filling Rivers

   While the Illinois and Mississippi rivers have been rising in recent weeks, 
the Minnesota Department of Natural Resources (DNR) has reported that 12 rivers 
in the state are at very high levels across southern Minnesota. Rain in that 
area has been relentless, flooding farm fields and rivers in Blue Earth, 
Cottonwood, Crow, LeSueur and other counties in that part of the state. 

   The National Weather Service in Chanhassen, Minnesota, noted that from 8 to 
14 inches of rain has fallen in much of southwestern and south-central 
Minnesota in the past two weeks. On Saturday and into Sunday, some of those 
same areas received scattered thunderstorms while heavy rains covered much of 
Iowa with 3 to 10 inches reported over the state. 

   Here is a link to the DNR river level site, which lists the current level of 
all the rivers in Minnesota: 
https://www.dnr.state.mn.us/river_levels/index.html 

   The Minnesota River is expected to rise to at least 30 feet by Thursday, 
July 5. Flood warnings likely will remain in effect on the Minnesota River at 
Savage through July 10. The river, a tributary of the Mississippi River, flows 
southeast from its source at Big Stone Lake on the South Dakota border to 
Mankato, Minnesota, then northeast to join the Mississippi River at Fort 
Snelling. As that river rises, it pushes water north and into the Mississippi 
River.

   On June 30, the Mississippi River from St. Paul to Winona was listed in the 
"very high" category, according to the DNR. The water level in St. Paul on July 
2 was at 13.5 feet and expected to move to 13.46 feet later in the day, unless 
more rain falls; minor flood stage is 14 feet. The Mississippi River at 
Burlington, Iowa, was at 17.7 feet on July 2; minor flood stage is 15 feet and 
major flood stage is 18 feet.

   Some elevators along the river have been scrambling to load barges, because 
when water levels get too high, barges can't fit under loading spouts. Another 
headache for loading elevators is that tows become restricted as to how many 
barges they can push when the water gets too high and is near or in flood stage.

   As of June 29, American Commercial Barge Line (ACBL) noted in their daily 
river updates that tows from St. Paul to Red Wing have been reduced from 12 
barges to six barges. From Red Wing to Prairie Du Chien, tows have been reduced 
from 12 barges to nine, and tows from Prairie Du Chien to St. Louis (UM 174) 
have been reduced from 15 barges to 12. ACBL said that an additional four to 
six days should be expected in pick-up time.

   In its weekly Grain Transportation Report, USDA noted that the return to 
high water will likely stall the recent surge in grain barge shipments. For the 
week ending June 21, grain barge tonnages on the locking portions of the 
Mississippi, Ohio, and Arkansas rivers were 1.1 million tons, continuing a 
three-week trend of tonnages exceeding 1 million tons per week. 

   "The recent surge has occurred as operating conditions have improved on most 
segments of the system, along with an increased demand for export corn. 
However, high water conditions are reoccurring on some parts of the Upper 
Mississippi and Illinois rivers, which might disrupt grain shipments," said 
USDA. Year-to-date tonnages have been about 8% lower than last year and 1% 
lower than the three-year average for the comparable time period. 

   At the Gulf, Tom Russell, Russell Marine Group said, "Water levels in the 
Baton Rouge/New Orleans Harbors are normal. Barge traffic and ocean vessel 
traffic are operating normally."

   As summer moves along, work on various locks and dams along the river system 
will slow traffic as well. At MM 811 on the Lower Mississippi River, ACBL has 
reported that contractors expect to be back to work on weir dike construction 
July 2 to July 3, and daily river closures will resume at this time. This 
closure will be for 12 hours each day, seven days a week and is expected to 
last 35 calendar days. This will be a full river closure during work hours; 
boats will only transit at night through this area.

   At Thebes, Illinois, near MM 38-46, rock removal has been ongoing but is 
always discontinued when water levels become too high. When levels drop and 
rock removal resumes, boat traffic is stopped during the daylight hours when 
work is in progress. Rock pinnacles need to be removed from the river bottom in 
an effort to keep the waterway at 9 feet deep in that stretch of the river to 
maintain a channel for barges to pass. 

   As the U.S. river system continues to age, repairs have become common, and 
at times, may stop barge traffic for days, depending on how much work needs to 
be done. Eventually, it is possible that some of the aging locks and dams may 
be beyond repair and will need to be replaced, which could stall traffic for 
weeks. 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Continue to Move Lower

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
40 locations DTN contacted was lower again this week at an average of $126 per 
ton for the week ended June 28, down $7 versus one week ago.

   Merchandisers noted the lower soymeal prices continue to pressure the DDG 
market, but even still, DDG has a per unit of protein cost advantage over 
soymeal. Also adding pressure to DDG prices is an increase in ethanol 
production, which is at its highest level since late December for the week 
ending June 22, according to the latest Energy Information Administration (EIA) 
report.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended June 28 was at 102.26%, and the value of DDG 
relative to soybean meal was at 38.02%. The cost per unit of protein for DDG 
was $4.67, compared to the cost per unit of protein for soybean meal at $6.98. 

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, " A 
modest move higher in FOB U.S. Gulf corn values is helping stabilize FOB Gulf 
DDGS prices, with quotes for the latter mixed today but not far off last week's 
values. Internationally, merchandisers are reporting Asian buyers were waiting 
for clarity and a market floor early this week but have now "settled" with 
current prices. Prices for containerized shipments to Southeast Asia are steady 
with product destined for Bangladesh one of the few routes showing a decrease.


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT     PREVIOUS CHANGE
                                                      6/21/
COMPANY   STATE                         6/28/2018      2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri          Dry            $145        $150    -$5
                            Modified       $75         $75      $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri  Dry                 $140         $160        -$20
Wet              $65           $70         -$5
CHS, Minneapolis, MN (800-769-1066)
          Illinois          Dry            $148        $150    -$2
          Indiana           Dry            $135        $145    -$10
          Iowa              Dry            $115        $130    -$15
          Michigan          Dry            $145        $150    -$5
          Minnesota         Dry            $110        $125    -$15
          North Dakota      Dry            $115        $130    -$15
          New York          Dry            $145        $155    -$10
          South Dakota      Dry            $115        $130    -$15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas            Dry            $125        $130    -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana           Dry            $145        $150    -$5
          Iowa              Dry            $115        $130    -$15
          Michigan          Dry            $145        $160    -$15
          Minnesota         Dry            $115        $130    -$15
          Missouri          Dry            $145        $150    -$5
          Ohio              Dry            $140        $150    -$10
          South Dakota      Dry            $115        $130    -$15
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas            Dry            $125        $140    -$15
                            Wet            $35         $40     -$5
          Illinois          Dry            $150        $150     $0
          Nebraska          Dry            $125        $140    -$15
                            Wet            $35         $40     -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois          Dry            $135        $135     $0
          Indiana           Dry            $130        $135    -$5
          Iowa              Dry            $115        $125    -$10
          Michigan          Dry            $125        $135    -$10
          Minnesota         Dry            $115        $125    -$10
          Nebraska          Dry            $110        $110     $0
          New York          Dry            $135        $135     $0
          North Dakota      Dry            $110        $115    -$5
          Ohio              Dry            $130        $140    -$10
          South Dakota      Dry            $110        $115    -$5
          Wisconsin         Dry            $130        $135    -$5
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
          Indiana           Dry            $130        $130     $0
          Iowa              Dry            $105        $112    -$7
          Minnesota         Dry            $105        $110    -$5
          Nebraska          Dry            $105        $100     $5
          Ohio              Dry            $140        $140     $0
          South Dakota      Dry            $110        $110     $0
          California                       $186        $181     $5
Western Milling, Goshen, California (559-302-1074)
          California        Dry            $210        $215    -$5
*Prices listed per ton.
          Weekly Average                   $126        $133    -$7
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

             VALUE OF DDG VS. CORN & SOYBEAN MEAL
               Settlement Price: Quote Date   Bushel Short Ton
                            Corn   6/28/2018 $3.4500   $123.21
                    Soybean Meal   6/28/2018 $331.40
   DDG Weekly Average Spot Price     $126.00
                      DDG Value Relative to:  6/28     6/21
                                        Corn 102.26%   104.31%
                                Soybean Meal  38.02%    40.08%
                   Cost Per Unit of Protein:
                                         DDG   $4.67     $4.93
                                Soybean Meal   $6.98     $6.99
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

******************************************************************************
Too Much of a Good Thing? Parts of the Upper Midwest Swamped by Rain

   In the past week, portions of southern Minnesota experienced 72-hour 
rainfall totals of 3 inches to over 5 inches. According to Minnesota Public 
Radio, heavy rain last Saturday (June 16) into early Sunday (June 17) was in 
excess of a half-foot in places. That led to flash flooding, washing out 
highways in parts of northeastern Minnesota and northwestern Wisconsin. Then 
midweek, heavy rain soaked parts of northern and central Iowa and southern 
Minnesota.

   Sioux Falls South Dakota newspaper, Argus Leader, reported that as of June 
20, rainfall totals in the Sioux Falls region was 3.35 inches, breaking the 
record of 2.09 inches set in 2011, according to the National Weather Service. 
At the Sioux Falls airport, 4.69 inches of rain was reported, while Rock 
Valley, Iowa, received 6.43 inches of rain; Marion, South Dakota, received 4.62 
inches and Luverne, Minnesota received 5.11 inches of rain.

   Social media is full of pictures of flooded fields in northern Iowa and 
southern Minnesota, and those areas were hit with more rain again Sunday night 
(June 24), causing flash flood emergencies to be posted by local weather media. 

   Many farmers have expressed concern that there would be yield loss, 
especially in soybeans. Beans don't like wet feet. If you aren't familiar with 
this age old saying, it means that soybeans sitting in water for an extended 
period of time will turn yellow, suffer reduction of nitrogen and may not 
recover enough to reach full yield potential.

   Angie Setzer, Vice President of Grain Citizens LLC Algona, Iowa, told me on 
June 24 that there is still a lot of water standing. "Many spots have been 
stunted because of the rain," she said. "There are definitely a lot of beans 
underwater and with the slower pace to planting this spring, not all of the 
corn is tall enough to handle it." Setzer noted that there is concern these 
issues could be compounded as hotter temperatures are expected to set in by the 
end of the week. 

   Alden, Minnesota, which is in the southern part of the state, has been more 
fortunate than the towns to the west, said Chad Schmidt. "We have minimal 
drowned out areas, but the ground is very saturated and we need to get soybeans 
sprayed and finish side dressing as soon as possible! I could've gotten into 
the field Monday, but we just got 1.5 inches and it looks to me more is on the 
way tonight (June 24) in to Tuesday."

   Adam Ramthun, a corn and soybean farmer from Manson, Iowa, told me on June 
21 that, "There is still plenty of standing water around Manson and Pomeroy, 
Iowa. Dredge ditches are finally going down from the high marks, so the field 
tiles are starting to work.

   "I think most of the spots where water stood in the beans has killed them. 
The rest of the beans aren't too happy sitting in saturated ground, but will be 
okay. Far from ideal conditions, but beans are goofy so you never know until 
the combine runs."

   Brett Scholting, BBH Territory Manager DuPont Pioneer, who lives in Dakota 
Dunes, South Dakota, told me that, "With much of southeast South Dakota, 
northeast Iowa, and southwest Minnesota getting rains that totaled over 12 
inches the last week -- we are soaked. Most of us got 6-plus inches Wednesday 
(June 20) to Thursday (June 21) alone."

   Can the Crops Recover?

   In the Minnesota Crop News Blog on June 22, various crop specialists from 
the University of Minnesota Extension Regional Office discussed agronomic and 
disease issues for corn and soybean exposed to prolonged periods of high soil 
moisture. They noted that to date, much of southern Minnesota has experienced 
one of the wettest growing seasons on record. The continued rainfall has made 
it difficult to implement post-emergence weed control and has now created 
concerns about crop health due to saturated soils and flooded field conditions 
in some locations.

   Given the June 22 calendar date, replanting corn is not an option, noted the 
article. "We will have to wait and see how soil flooding affects corn 
mortality. Completely submerged plants are at higher risk of mortality than 
partially submerged plants. Survivability is impacted by how fast the water 
recedes and temperatures during the flooded conditions. Cooler temperatures 
(mid-70s or cooler) are generally better for crop survivability.

   "Generally corn should be able to survive a couple days of flooded 
conditions, but this is complicated by the fact that many spots have flooded 
multiple times this season. Some root death is likely in flooded soils, and new 
root growth will be hindered until the soil adequately dries. Affected plants 
could be subject to drought stress if dry conditions follow."

   As for the soybean crop, the article stated that, although soybeans are 
generally sensitive to excess water, they can survive underwater for a week or 
more under ideal conditions. "Typically soybeans tolerate 48 hours under water 
quite well, but flooding for four to six days can reduce stands, vigor and 
eventually yield. Many factors determine how well a soybean crop will tolerate 
flooding. The most important factors that determine the fate of flooded soybean 
fields are: 1) duration of the flooding, 2) temperature during the flooding, 3) 
rate of drying after the flooding event, and 4) growth stage of the crop during 
the flooding. Some of the main indirect effects of flooding on soybean yields 
are: 1) root diseases, 2) N deficiency, and 3) other plant nutrient 
imbalances." 

   Here is a link to the entire article, which also includes the names of the 
extension specialists who contributed to the article: 

   
http://blog-crop-news.extension.umn.edu/2018/06/continued-rainfall-and-excessive
ly-wet.html 

   A farmer on social media said that while he hates to complain about too much 
rain, he is going to complain about too much rain. That's likely the sentiment 
of any farmer who has watched their fields turn in to swampland the past week.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Continue to Push Lower

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
40 locations DTN contacted was sharply lower again this week at an average of 
$133 per ton for the week-ended June 21, down $16 versus one week ago.

   Merchandisers noted that prices remain competitive with soymeal values this 
week, with some plants lowering offers to move more product. Besides a seasonal 
slowdown in demand, it hasn't helped matters that soybeans and corn have also 
been on a downward slide. Favorable growing weather, along with the escalation 
of the trade wars between the U.S and China and other countries, continues to 
pressure the markets. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended June 21 was at 104.31%, and the value of DDG 
relative to soybean meal was at 40.08%. The cost per unit of protein for DDG 
was $4.93, compared to the cost per unit of protein for soybean meal at $6.99. 

   In its weekly price update, the U.S. Grains Council (USGC) reported: "On the 
export market, Barge CIF NOLA and FOB Gulf DDGS values are lower in sympathy 
with falling corn and soymeal values. Values for containerized product to 
Southeast Asia are lower as well. Still, FOB Gulf DDGS prices are at 136% of 
FOB Gulf corn values, with the above-average figure signaling solid demand for 
DDGS. Moving forward, merchandisers believe there should be a correction period 
that entails price increases."


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                               6/21/2018       6/14/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $150           $155       -$5
                              Modified           $75             $80       -$5
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
          Missouri            Dry                $160           $160       $0
                              Wet                $70             $70       $0
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $150           $162      -$12
          Indiana             Dry                $145           $158      -$13
          Iowa                Dry                $130           $145      -$15
          Michigan            Dry                $150           $163      -$13
          Minnesota           Dry                $125           $140      -$15
          North Dakota        Dry                $130           $140      -$10
          New York            Dry                $155           $170      -$15
          South Dakota        Dry                $130           $145      -$15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $130           $150      -$20
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $150           $155       -$5
          Iowa                Dry                $130           $150      -$20
          Michigan            Dry                $160           $170      -$10
          Minnesota           Dry                $130           $145      -$15
          Missouri            Dry                $150           $165      -$15
          Ohio                Dry                $150           $160      -$10
          South Dakota        Dry                $130           $145      -$15
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $140           $150      -$10
                              Wet                $40             $40       $0
          Illinois            Dry                $150           $160      -$10
          Nebraska            Dry                $140           $150      -$10
                              Wet                $40             $40       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $135           $155      -$20
          Indiana             Dry                $135           $150      -$15
          Iowa                Dry                $125           $140      -$15
          Michigan            Dry                $135           $150      -$15
          Minnesota           Dry                $125           $140      -$15
          Nebraska            Dry                $110           $125      -$15
          New York            Dry                $135           $150      -$15
          North Dakota        Dry                $115           $140      -$25
          Ohio                Dry                $140           $155      -$15
          South Dakota        Dry                $115           $140      -$25
          Wisconsin           Dry                $135           $145      -$10
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $130           $150      -$20
          Iowa                Dry                $112           $135      -$23
          Minnesota           Dry                $110           $140      -$30
          Nebraska            Dry                $100           $125      -$25
          Ohio                Dry                $140           $155      -$15
          South Dakota        Dry                $110           $145      -$35
          California                             $181           $195      -$14
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $215           $220       -$5
*Prices listed per ton.
          Weekly Average                         $133           $149      -$16
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      6/21/2018   $3.5700      $127.50
                             Soybean Meal      6/21/2018   $331.80
            DDG Weekly Average Spot Price        $133.00
                                  DDG Value Relative to:   6/21        6/14
                                                    Corn   104.31%      114.93%
                                            Soybean Meal    40.08%       43.41%
                               Cost Per Unit of Protein:
                                                     DDG     $4.93        $5.52
                                            Soybean Meal     $6.99        $7.23
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

******************************************************************************
New Bipartisan Bill Delays ELD Enforcement, Says Reforms Needed

   On June 12, Sens. John Hoeven, R-N.D., and Michael Bennet, D-Colo., 
introduced the Modernizing Agricultural Transportation Act, bipartisan 
legislation to reform hours of service and electronic logging device (ELD) 
regulations at the U.S. Department of Transportation. The bill would also delay 
enforcement of the ELD rule until the "reforms required under the bill are 
formally proposed by the U.S. Secretary of Transportation."

   In an update to the ELD issues I wrote on June 4 titled "Time Running Out 
for Agriculture ELD Exemption," I noted that while livestock haulers were 
temporarily exempt from installing and using ELDs, ag haulers would lose their 
waiver as of midnight on June 18. To read my full column, visit 
https://www.dtnpf.com/agriculture/web/ag/perspectives/blogs/market-matters-blog/
blog-post/2018/06/04/time-running-agriculture-eld 

   In a news release on his website, Sen. Hoeven, a member of the Senate 
Appropriations Committee on Transportation, said, "Improving highway safety is 
an important goal, but the rules we put in place must recognize the very real 
challenges faced by those who haul livestock and other perishable commodities.

   "Our legislation would delay enforcement while ensuring that the HOS and ELD 
rules are reformed with the concerns of all impacted stakeholders taken into 
account. That means providing a permanent, flexible solution that both 
strengthens safety and ensures the humane transportation of livestock."

   Sen. Bennet added in the release: "Our bipartisan legislation will provide 
Colorado's farmers and ranchers a seat at the table to help develop sensible 
rules around the transportation of agricultural goods. It is important that we 
maintain safe roads for all, while also recognizing the unique flexibility 
needed for the transportation of Colorado's agriculture products."

   Specifically, the Hoeven-Bennet bill would establish a working group at the 
Department of Transportation (DOT) to "identify obstacles to the safe, humane 
and market-efficient transport of livestock and, within one year of the group's 
establishment, develop guidelines for regulatory or legislative action to 
improve the transportation of these commodities." 

   The working group will be comprised of representatives from the 
transportation and agriculture industries, as well as USDA, and is required to 
consider the following:

   -- The impact, incompatibilities and other challenges and concerns of 
existing HOS rules and ELD rules under the Federal Motor Carrier Safety 
Administration (FMCSA) on the commercial transport of livestock, insects and 
agricultural commodities.

   -- Initiatives and regulatory changes that maintain and protect highway 
safety and allow for the safe, efficient and productive marketplace transport 
of livestock, insects and agricultural commodities.

   -- Other related issues that the Transportation Secretary considers 
appropriate.

   The news release noted that within 120 days of receiving the working group's 
report, the transportation secretary must propose regulatory changes to the HOS 
and ELD regulations, taking into account the findings and recommendations of 
the working group.

   SAFETY ADVOCATES OPPOSE BILLS TO CHANGE/EXEMPT REGULATIONS

   Another bill that would make changes to the transport rules, the 
Transporting Livestock Across America Safely Act, is facing opposition by 
transportation groups. Lane Kidd, executive director of the Trucking Alliance, 
and Catherine Chase, president of Advocates for Highway and Auto Safety, sent a 
letter to U.S. senators and members of the House opposing bill S.2938.

   This bill was introduced on May 23, 2018, by Sens. Ben Sasse, R-Neb.; Heidi 
Heitkamp, D-N.D.; Jerry Moran, R-Kan.; Joni Ernst, R-Iowa; Jon Tester, D-Mont.; 
John Hoeven, R-N.D.; Tina Smith, D-Minn.; Pat Roberts, R-Kan.; Rand Paul, 
R-Ky.; Marco Rubio, R-Fla.; and Doug Jones, D-Ala. The bill seeks to ease the 
burden of "far-reaching" HOS and ELD regulations for haulers of livestock and 
insects. For the full text of the bill, visit 
https://www.congress.gov/bill/115th-congress/senate-bill/2938/text

   In their letter to members of Congress, Kidd and Chase wrote, "Not only 
would the bill exempt thousands of truck drivers from using an ELD, but it 
would also arbitrarily increase the number of federal on-duty driving hours 
they can operate a vehicle.

   "While ostensibly these increases are for agricultural haulers, the proposed 
changes to the hours limits would compel many similarly situated local and 
regional haulers to request comparable exemptions. This would have the effect 
of nullifying to a very significant degree the HOS limits the Federal Motor 
Carrier Safety Administration (FMCSA) has established for much of the industry."

   Also in their letter, Kidd and Chase wrote: "Instead of exempting livestock 
haulers from this safety requirement, they should be encouraged to develop an 
answer to their logistics management issue. Regardless of commodities hauled, 
we should never sacrifice the safety of the general public sharing our highways 
or the truck drivers delivering them for the purpose of getting any product to 
market." Here is link to the entire letter: 
http://www.dtn.com/ag/assets/S.2938_Opposition_Letter_from_Advocates.pdf 

   Bill Sullivan, ATA executive vice president for advocacy, told various 
trucking news groups that the proposed bills threaten to impede highway safety 
and "runs in direct conflict with adherence to the hours of service rules that 
govern the operation of commercial motor vehicles. Rolling these rules back 
will punish motor carriers and drivers who have followed the rules and will 
diminish compliance."

   The ELD and HOS issues have become double-edged swords and will continue to 
remain such until an equitable and safe compromise can be reached.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Continue Downward Slide

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations DTN contacted was sharply lower again this week at an average of 
$149 per ton for the week-ended June 14, down $11 versus one week ago.

   Merchandisers noted that the sharp decline seen again this week can be 
blamed on the recent large losses in corn and soymeal prices. Also, there is no 
shortage of product, as the most recent EIA report showed that ethanol plant 
production was estimated at 1.053 million barrels per day for the week-ending 
June 8, slightly higher than the prior week.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended June 14 was at 114.93%, and the value of DDG 
relative to soybean meal was at 43.41%. The cost per unit of protein for DDG 
was $5.52, compared to the cost per unit of protein for soybean meal at $7.23. 
Even with the drop in DDG prices, DDG remains a better value in rations than 
soymeal on a per-protein unit cost.

   In its weekly price update, the U.S. Grains Council (USGC) reported: 
"Internationally, FOB U.S. Gulf DDGS values slipped this week while containers 
CIF Southeast Asia fell $8 per metric ton on average.


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT        PREVIOUS  CHANGE
COMPANY    STATE                               6/14/2018       6/7/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri            Dry                $155           $170     -$15
                               Modified           $80            $85       -$5
CHS, Minneapolis, MN (800-769-1066)
           Illinois            Dry                $162           $172     -$10
           Indiana             Dry                $158           $165      -$7
           Iowa                Dry                $145           $160     -$15
           Michigan            Dry                $163           $165      -$2
           Minnesota           Dry                $140           $155     -$15
           North Dakota        Dry                $140           $155     -$15
           New York            Dry                $170           $170      $0
           South Dakota        Dry                $145           $160     -$15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas              Dry                $150           $158      -$8
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana             Dry                $155           $175     -$20
           Iowa                Dry                $150           $165     -$15
           Michigan            Dry                $170           $175      -$5
           Minnesota           Dry                $145           $160     -$15
           Missouri            Dry                $165           $175     -$10
           Ohio                Dry                $160           $175     -$15
           South Dakota        Dry                $145           $160     -$15
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas              Dry                $150           $158      -$8
                               Wet                $40            $40       $0
           Illinois            Dry                $160           $172     -$12
           Nebraska            Dry                $150           $158      -$8
                               Wet                $40            $40       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois            Dry                $155           $165     -$10
           Indiana             Dry                $150           $160     -$10
           Iowa                Dry                $140           $145      -$5
           Michigan            Dry                $150           $155      -$5
           Minnesota           Dry                $140           $140      $0
           Nebraska            Dry                $125           $140     -$15
           New York            Dry                $150           $165     -$15
           North Dakota        Dry                $140           $145      -$5
           Ohio                Dry                $155           $160      -$5
           South Dakota        Dry                $140           $145      -$5
           Wisconsin           Dry                $145           $145      $0
Valero Energy Corp, San Antonio Texas      (210-345-3362)     (210-345-3362)
           Indiana             Dry                $150           $165     -$15
           Iowa                Dry                $135           $160     -$25
           Minnesota           Dry                $140           $160     -$20
           Nebraska            Dry                $125           $140     -$15
           Ohio                Dry                $155           $165     -$10
           South Dakota        Dry                $145           $165     -$20
           California                             $195           $220     -$25
Western Milling, Goshen, California (559-302-1074)
           California          Dry                $220           $230     -$10
*Prices listed per ton.
           Weekly Average                         $149           $160     -$11
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      6/14/2018   $3.6300      $129.64
                             Soybean Meal      6/14/2018   $343.20
            DDG Weekly Average Spot Price        $149.00
                                  DDG Value Relative to:   6/14        6/7
                                                    Corn   114.93%      119.07%
                                            Soybean Meal    43.41%       44.64%
                               Cost Per Unit of Protein:
                                                     DDG     $5.52        $5.93
                                            Soybean Meal     $7.23        $7.55
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

******************************************************************************
New Crop, New Year for Winter Wheat 

   What a difference a year makes. When I wrote the 2016-17 year-end story for 
hard red winter (HRW) wheat, the DTN national average basis chart had a 
completely different look than the 2017-18 chart. The basis for 2016-17 was 
dismal as it stayed well below the DTN five-year minimum average basis for the 
entire crop year. Between August and January of that crop year, basis was at 
historic lows.

   As you can see by the attached chart, the 2017-18 crop year started out well 
above the prior crop year and ended higher than the DTN five-year average 
basis. In the Jan. 12 NASS planting report of winter wheat in 2018, acres were 
estimated at 32,608,000, which represented the smallest winter wheat-seeded 
area since 1909. Planting delays in the fall of 2017 was one of the reasons for 
the lower acreage, which became a boost for premiums.

   The 13% protein basis levels were historically strong while basis for ords 
(10% and lower) were relatively weak during the past year, as the 2017 new-crop 
harvest produced an average protein of 11.4% on top of a 2016 crop protein 
average of 11.2%. The premium spread remained wide due to an abundance of lower 
protein HRW wheat available versus higher protein wheat. Mills had to get 
creative to make the blends needed for flour, and while they could also use 
spring wheat, it too was expensive, just like the higher protein winter wheat.

   As the new-crop year approached for HRW wheat, the basis spread between 13% 
protein and ords has weakened from recent highs. Depending on the weather 
conditions between now and the end of harvest, that spread could weaken even 
further from current levels. 

   According to Informa Economics, "For the spread to maintain near-current 
levels, basis quotes for ords and 13% would need to generally move together. 
The wideness in the spread in 2016 and 2017 was due to both a weakening of 
ordinary basis quotes and a strengthening of 13% quotes. On average, for the 
2018-19 crop year, the spread between HRW 13% and ordinaries is forecast to 
average about 50 cents. If realized, the average spread would be down from 
2016-17 and 2017-18 levels."

   In their June 8 weekly wheat harvest report, U.S. Wheat Associates noted an 
average so far of 13% protein with harvest still in early stages. "The 2018 HRW 
harvest raced northward over the past week into southern Kansas, slowed only by 
locally heavy rain June 7 across areas of north-central Oklahoma and 
southeastern Kansas. The Texas harvest is now 39% complete and Oklahoma's 
harvest is 51% complete. Yields continue to be variable with a current average 
estimated at under 25 bushels per acre (1.7 tons/ha). Hot temperatures forecast 
for next week should push maturity." 

   What Lies Ahead for HRW Wheat Prices?

   I asked Dan Maltby, a former HRW buyer in Kansas City and now a consultant 
for Risk Management Group in Minneapolis, for his insight into the year ahead. 
While we are very early in to the new year and don't have a firm grasp on 
new-crop quality and protein, some things always seem to be constant. 

   "Never forget nobody can pay more for wheat than a miller" appears to be the 
theme of this upcoming year, said Maltby. "Translation: In a supply-constrained 
year, basis will be firm, as millers will be reluctant to let supply get away 
easily."

   "As mills force the market higher, that forces terminals to pay up, which 
would make exporters pay up; IF they had to do some business, which so far, 
they do not. Assuming all of this was foreseen, then that would explain the 
local cash bid basis rising 85 cents in the past six months," added Maltby. 
"It's certainly not due to exporters, as we've seen the posted gulf bids for 
12% pro drop 60 cents in the same time."

   Maltby said that particular spread has moved $1.45/bushel, "which of course 
is indicative of the collapse of protein premiums, which may help explain the 
collapse of the Minny/KC futures spreads, which leads into big spring wheat 
acreage increases in North Dakota and Canada."

   An interesting question is there are so few HRW wheat bushels coming, will 
it force a narrowing of the Kansas City calendar spreads? "I lean towards not," 
said Maltby. "UNLESS of course, Brazil actually becomes a significant buyer of 
U.S. HRW wheat, which would only happen if Argentina's drought is severe enough 
and Argentina goes ahead with a 10% tax on wheat exports."

   Maltby said he wonders if these HRW prices are now good enough to cause an 
uptick in U.S. HRW wheat acres, and if so, will these winter wheat prices be 
"sustainable"?

   "Unfortunately," he said, "that question is better answered by the answer to 
this question; will Black Sea fob quotes stay at $205/metric ton, or will they 
next year sink again to $170 sellers?"

   As usual, our export business relies on us being cheaper than everyone else 
and more times than not, it is a tough playing field for the U.S. Informa 
Economics reported that, "For the U.S. to have an export program that notably 
exceeds 900 million bushels, a significant production cut likely would be 
needed for Russia. But, expectations are that much of the business would switch 
to the EU."

   The Northern Hemisphere largely is in its growing and planting seasons for 
winter and spring wheat, which, with adverse or favorable weather in the coming 
weeks, could change the supply and the price outlooks, added Informa Economics.

   In the U.S., the June 3 USDA Crop Progress report showed 9% of the U.S. 
winter wheat was harvested, as harvest is still in its early stages. Conditions 
slipped a little with 14% of the crop rated very poor, 21% rated poor, 28% 
rated fair, 29% rated good and 8% rated excellent. 

   Until the U.S. and Northern Hemisphere new-crop bushels are harvested, 
graded and in the bin, hopefully escaping any serious weather issues between 
now and then, the cash price for the new year remains unpredictable.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Sharply Lower

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations DTN contacted was $160 per ton for the week-ended June 7, $11 
lower versus one week ago.

   Merchandisers noted that it was "time" for prices to move lower seasonally, 
along with the lack of fresh news, especially with recent hopes fading that 
China may adjust the stiff penalties currently placed on U.S. DDGS imports. DDG 
prices have been strong for the majority of 2018. But, as summer arrives and 
with no positive news coming out of China as the trade war continues, markets 
are moving lower. Also, recent losses in corn and soymeal prices are putting 
pressure on the market as well. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended June 7 was at 119.07%, and the value of DDG relative 
to soybean meal was at 44.64%. The cost per unit of protein for DDG was $5.93, 
compared to the cost per unit of protein for soybean meal at $7.55. 

   In their weekly price update, U.S. Grains Council (USGC) reported: "On the 
export market, Barge CIF NOLA and FOB U.S. Gulf values are lower, with a larger 
drop in the latter squeezing netbacks to merchandisers. Rising freight rates 
have kept prices for containerized DDGS shipped CNF to Southeast Asia more 
stable this week. In sympathy with lower soybean meal values, exporters lowered 
asking prices for product destined for Southeast Asia approximately $7 per 
metric ton." (CNF is similar to CIF only insurance is not included)

   The U.S. Census Bureau said Wednesday that U.S. exports of DDGS totaled 
997,633 metric tons (mt) in April, up 15% from a year ago. Mexico was the top 
export destination again in April, accounting for 18% of the total and followed 
by Vietnam, South Korea and Thailand. In the first four months of 2018, U.S. 
DDGS exports were down 7% versus one year ago.


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                                6/7/2018       5/31/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $170           $175       -$5
                              Modified           $85             $88       -$3
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $172           $180       -$8
          Indiana             Dry                $165           $174       -$9
          Iowa                Dry                $160           $170      -$10
          Michigan            Dry                $165           $175      -$10
          Minnesota           Dry                $155           $170      -$15
          North Dakota        Dry                $155           $170      -$15
          New York            Dry                $170           $175       -$5
          South Dakota        Dry                $160           $165       -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $158           $160       -$2
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $175           $180       -$5
          Iowa                Dry                $165           $170       -$5
          Michigan            Dry                $175           $180       -$5
          Minnesota           Dry                $160           $170      -$10
          Missouri            Dry                $175           $185      -$10
          Ohio                Dry                $175           $180       -$5
          South Dakota        Dry                $160           $170      -$10
    `              `
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $158           $162       -$4
                              Wet                $40             $50      -$10
          Illinois            Dry                $172           $181       -$9
          Nebraska            Dry                $158           $162       -$4
                              Wet                $40             $50      -$10
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $165           $175      -$10
          Indiana             Dry                $160           $175      -$15
          Iowa                Dry                $145           $160      -$15
          Michigan            Dry                $155           $170      -$15
          Minnesota           Dry                $140           $165      -$25
          Nebraska            Dry                $140           $150      -$10
          New York            Dry                $165           $180      -$15
          North Dakota        Dry                $145           $165      -$20
          Ohio                Dry                $160           $170      -$10
          South Dakota        Dry                $145           $160      -$15
          Wisconsin           Dry                $145           $170      -$25
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $165           $180      -$15
          Iowa                Dry                $160           $170      -$10
          Minnesota           Dry                $160           $170      -$10
          Nebraska            Dry                $140           $170      -$30
          Ohio                Dry                $165           $180      -$15
          South Dakota        Dry                $165           $165       $0
          California                             $220           $234      -$14
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $230           $238       -$8
*Prices listed per ton.
          Weekly Average                         $160           $171      -$11
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn       6/7/2018   $3.7625      $134.38
                             Soybean Meal       6/7/2018   $358.40
            DDG Weekly Average Spot Price        $160.00
                                  DDG Value Relative to:    6/7        5/31
                                                    Corn   119.07%      121.52%
                                            Soybean Meal    44.64%       45.56%
                               Cost Per Unit of Protein:
                                                     DDG     $5.93        $6.33
                                            Soybean Meal     $7.55        $7.90
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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