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Market Matters Blog 12/09 08:35
UMR 2019 Barge Navigation Season Ends; Duluth Grain Shipping End Near
DTN Weekly Average DDG Price Higher
Good Riddance to 2019 Soybean Harvest
Electronic Logging Device Challenged as Final Compliance Date Nears
DTN Weekly Average DDG Price Firm
2019 Beet Harvest Over: Frozen Sugarbeets Left to Rot in Upper Midwest
DTN Weekly Average DDG Price Higher
As Harvest Drags On, Producers Reminded to Cool Stored Grain
DTN Weekly Average DDG Price Slightly Higher
Corn Futures: A Look at Bullish, Bearish Influences
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UMR 2019 Barge Navigation Season Ends; Duluth Grain Shipping End Near
The start of the 2019 navigation season in the Upper Mississippi River (UMR)
was late and drawn out. The Motor Vessel Aaron F. Barrett, pushing 12 barges
heading to St. Paul, Minnesota, finally locked through Lock and Dam 2 near
Hastings on April 24. The average date for the first tow to reach St. Paul is
around March 18. The historic flooding and ensuing lock closures kept most of
the entire UMR closed on and off for months, including the closure of the St.
Louis Harbor shutting down barges from moving up or downriver through there on
three different occasions in the late spring and early summer.
"Following the Barrett, there would not be another tow to reach St. Paul for
more than three weeks due to spring flooding," said the U.S. Army Corps of
Engineers St. Paul District (USACE, Corps). "The second tow to reach the
capital city was the Motor Vessel Thomas E. Erickson on May 20."
When barges were finally able make their way in to the UMR, the late corn
and soybean harvest left hundreds of barges parked along the Mississippi River
in St. Paul from late summer through November. Many of those empty barges were
moved back downriver ahead of the winter closure.
The St. Paul District Corps reported the last tow of the season, Motor
Vessel Kelly Rae Erickson, departed St. Paul, Minnesota, Thursday, Nov. 28,
"bookmarking" a challenging navigation season.
"There were more than 12,000 commercial vessels and 77 million tons of
commodities shipped this season. The shorter navigation season resulted in
approximately a 30% drop in tonnage compared to the 2018 navigation season and
about 25% drop from the 10-year average," noted the Corps.
"The 2019 navigation season was one of the more challenging seasons we've
had in a while," said Jim Rand, St. Paul District locks and dams chief. "We had
a really late start due to Mother Nature and fought high water much of the
summer. Fortunately, we were able to work with our partners and keep the system
open to ensure commodities such as corn and soybeans could reach global
markets."
WINTER CLOSURE ALLOWS UNINTERRUPTED KEY MAINTENANCE ON UMR
The Corps noted there will be major repairs at three of its locks over the
winter "to ensure they continue working as designed." Maintenance is scheduled
at Lock and Dam 6, near Trempealeau, Wisconsin; Lock and Dam 8, near Genoa,
Wisconsin; and Lock and Dam 9, near Lynxville, Wisconsin, Dec. 10 through March
13, 2020.
"The work includes concrete repairs and repairs to the tow haul rail system,
which is used to move barges upstream of the lock chamber when a tow is heading
north and there is a need to break the tow into two lockages. A tow with more
than six barges must be split up when going through a lock due to size
limitations," said the Corps.
All of the construction activities are scheduled to be completed during the
winter to avoid impacts to the navigation industry. The completed work will
improve safety for Corps lock operators and industry deckhands.
"Having the tow haul rail system working is critical to keeping our lock
staff safe and ensuring navigation vessels can efficiently lock through our
facilities," said Rand. "With a lot of this infrastructure more than 80 years
old, it's critical that we find value-added solutions to maintain the system
and ensure navigation continues transporting commodities made in the upper
Midwest to global markets."
The construction activities are a part of more than $18 million dollars in
scheduled repairs at the St. Paul District locks over the next three years.
GREAT LAKES GRAIN SHIPPING SEASON ENDING
On Dec. 4, the St. Lawrence Seaway published SEAWAY NOTICE NO. 17, "Closing
of the 2019 Navigation Season," detailing the closing dates for various locks
and ports ahead of the winter closure. All vessels must be clear of the
Montreal-Lake Ontario section of the St. Lawrence Seaway at 1200 hours on Dec.
31, 2019, according to the Seaway notice.
Click here to see the notice:
https://dtn.box.com/s/6nrsgrfchuda7nst768d0wce7uv17czg
As part of a season extension pilot program this navigation season, the
Welland Canal will remain open until 1200 hours on Jan. 8, 2020. Then,
according to the USACE, the Soo Locks will close Jan. 15, 2020, ending the 2019
Great Lakes shipping season.
At the western tip of Lake Superior and located 2,300 miles from the
Atlantic Ocean, the Port of Duluth-Superior is the farthest-inland freshwater
seaport in North America and one of the leading bulk cargo ports in all of
North America. By far, the largest and busiest on the Great Lakes, the Port of
Duluth-Superior handles an average of 35 million short tons of cargo and nearly
900 vessel visits each year, connecting the heartland of the U.S. and Canada to
the rest of the world, according to the Duluth Seaway Port Authority.
The Twin Ports of Duluth, Minnesota, and Superior, Wisconsin, handle a
diversified commodities base ranging from coal, iron ore, grain, and limestone
to cement, salt, wood pulp, steel coil, wind turbine components, and other
heavy lift/dimensional equipment, notes the Port Authority on their website.
Two distinct types of ships visit the Port on a regular basis. "Lakers" are
bulk carriers specially built to move through the Great Lakes St. Lawrence
Seaway. "Salties" are ocean-going vessels that haul mainly wheat and durum out
of the Twin Ports to Europe and North Africa and are the last vessels to arrive
in the spring once the winter ice is navigable.
The grain shipping season out of the Port of Duluth-Superior will likely end
before Christmas. I asked Jayson Hron, Director of Communications and
Marketing, Duluth Seaway Port Authority, when the last grain ship would be
leaving Duluth. "It takes approximately five days for a ship to travel from
Duluth to Montreal, so it would have to depart Duluth by Dec. 26 at the latest.
Typically, the last saltie departs Duluth-Superior earlier than that. Our
latest saltie departure on record is Dec. 22. Usually the last saltie departs
sometime between Dec. 18-22,"said Hron.
As of Dec. 7, there was ice already forming along the shorelines of Lake
Superior and Lakes Michigan, Huron and Ontario, according to NOAA. While ice
coverage is less than 1% and won't hamper vessels heading out of Duluth ahead
of the winter closure yet, there are ice breakers available to guide vessels
through ice if and when it becomes difficult to break through.
Similar to the UMR, the Great Lakes locks will undergo critical maintenance
over the winter by USACE, Detroit District, who maintains a navigation system
of 95 harbors, including the Great Lakes Connecting Channels that join lakes
Superior, Michigan, Huron, St. Clair and Erie.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DTN Weekly Average DDG Price Higher
OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average
spot price from the 40 locations DTN contacted was up $1 at $144 per ton for
the week ended Dec. 5. Prices were firm this week as cash corn prices were
strong last week and other feed products moved higher during the holiday week.
Wednesday's weekly Energy Information Administration report noted for the
week ended Nov. 29, U.S. ethanol supply moved off its lowest level since early
2017, rising 362,000 barrels (bbl) to 20.639 million bbl. The weekly report
also noted plant production was higher amid declining demand.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Dec. 5 was at 110.31%. The value of DDG relative to
soybean meal was at 48.08%. The cost per unit of protein for DDG was $5.33,
compared to the cost per unit of protein for soybean meal at $6.31. The
DDG-to-soymeal price ratio continues to remain above the three-year average.
In its weekly export DDGS update, the U.S. Grains Council noted, "The U.S.
DDGS market is quiet this week with Barge CIF NOLA and FOB NOLA offers lower in
sympathy with falling transportation costs. DDGS rail-delivered to the Pacific
Northwest are down $1 to $2 per metric ton (mt) this week with merchandisers
citing better rail rates. Internationally, exporters cite strong demand for
U.S. feedstuffs from Southeast Asia. Containerized DDGS delivered to Southeast
Asia are $2 to $4/mt higher this week and are averaging $243/mt for December
shipment."
The U.S. Census Bureau reported Dec. 5 that October DDGS export shipments
were down 27% to an eight-month low at 759,979 mt, down nearly 258,000 mt
versus one year ago. Mexico remains the top buyer of U.S. DDGS, with October
shipments up 8%. Turkey and New Zealand were absent buyers in October, adding
to the lower volume for the month.
* CIF (cost, insurance and freight paid by seller) NOLA (New Orleans)
* FOB (free on board means buyer pays costs of ocean freight, insurance,
unloading, and transportation from originating port)
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 12/5/2019 11/21/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $162 $155 $7
Wet $81 $78 $3
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $165 $160 $5
Wet $80 $80 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $135 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $150 $150 $0
South Dakota Dry $125 $125 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $150 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $140 $10
Iowa Dry $138 $137 $1
Michigan Dry $135 $135 $0
Minnesota Dry $137 $137 $0
Missouri Dry $155 $155 $0
Ohio Dry $150 $145 $5
South Dakota Dry $150 $145 $5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $55 $55 $0
Illinois Dry $153 $153 $0
Nebraska Dry $150 $150 $0
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $145 $0
Indiana Dry $145 $145 $0
Iowa Dry $145 $145 $0
Michigan Dry $140 $140 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
New York Dry $165 $165 $0
North Dakota Dry $135 $135 $0
Ohio Dry $150 $150 $0
South Dakota Dry $135 $135 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas
Indiana Dry $150 $150 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $145 $145 $0
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
California Dry $208 $208 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $218 $214 $4
*Prices listed per ton.
Weekly Average $144 $143 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 12/5/2019 $3.6550 $130.54
Soybean Meal 12/5/2019 $299.50
DDG Weekly Average Spot Price $144.00
DDG Value Relative to: 12/5 11/21
Corn 110.31% 108.66%
Soybean Meal 48.08% 47.51%
Cost Per Unit of Protein:
DDG $5.33 $5.30
Soybean Meal $6.31 $6.34
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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Good Riddance to 2019 Soybean Harvest
Normally, I would have written a soybean harvest story in late October. This
year, however, soybean harvest was very late for many and, in fact, is still
not 100% finished. The most recent USDA Crop Progress report showed that
soybean harvest nationwide was 94% completed as of Nov. 25. The states where
soybean harvest was running well behind average were North Dakota at 89%
finished versus 99% average, Michigan at 80% versus 94% average and Wisconsin
at 82% versus 97% average. Because the soybean harvest is not finished, USDA
plans to report soybean harvest for the week ended Dec. 1 in its Monday Crop
Progress report.
While farmers continue to struggle with the harvest, perhaps the bright spot
in this frustrating season was the DTN national average soybean basis. During
the third week of October, the DTN national average basis climbed out of the
cellar and above the five-year minimum average basis, surpassing the five-year
average that week. Since that time, the soybean basis has continued to move
higher, which is a phenomenon for a harvest-time basis, especially soybeans.
Here is a story I wrote on Oct. 28 giving insight as to some of the reasons for
the newfound basis strength:
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
9/10/28/soybean-basis-climbs-cellar.
As October turned to November, the DTN national average basis has still been
a rising star. However, even with the strong basis, many farmers are incurring
drying costs and many are taking other quality discounts that can chip away at
their final price and year-end profit.
After getting harvest comments from various Midwest farmers and elevator
managers -- some with lower yields and quality issues -- one can see why
soybean basis has remained strong for this time of year.
Ryan Wagner, Wagner Farms, Roslyn, South Dakota, told me that they usually
like to start soybean harvest around the last two weeks of September, but got
off to a late start this year because the beans weren't quite ready yet.
"We did manage to get a few acres done Oct. 8 and Oct. 9, but then a
snowstorm and rain that followed kept us out of the field until Oct. 18.
Lodging due to the snow was minimal, but the saturated ground conditions,
high-moisture soybeans, sloppy gravel road conditions and road closures due to
flooding made it a challenge," said Wagner.
Wagner said that the cold snap in late October helped to "float machinery
across fields without making a huge mess but that didn't help the soybeans dry
down at all, and we ended up sending about half of them through the dryer. We
were able to combine a few loads one day with moisture content around 13%, but
for the most part, they were in that 15% to 18% range, right up until we
finished on Nov 12. We did see some well-drained areas yielding fairly well,
but still below potential, and field averages were well below APH (actual
production history) due to large areas that were low yielding or completely
drown out."
"Harvest was delayed until early October due to late planting dates and wet
conditions that remained into this fall and then even more rain," said Cory
Tryan, grain department manager Alton Grain Terminal, LLC Hillsboro, North
Dakota. "Some areas were able to poke around on high ground and get some beans
harvested mid-October for a couple days as some farms were still trying to get
done with their wheat. Other areas finally started the last three days of
October when some of wettest fields began to hold equipment up.
"Another big rain saturated fields to the max and left a lot of water
standing. The majority of harvest was finished between Nov. 6 and Nov. 15 when
an early November freeze up allowed equipment back into the fields. This same
hard freeze is when the beet harvest here was shut down for good. We still have
a small amount of beans in the field but would say 96% complete now," said
Tryan.
Tryan also noted that the entire harvest was over the moisture limits and
needed drying, but noted it wasn't as wet as the second half of harvest 2018,
which was full of snow and at 19% to 21% moisture.
"The majority of this 2019 crop came off 15% to 18% moisture," Tryan said.
"We still have a half-million bushels in house on fans to get through the
dryers. Farmers have hauled more beans off the field than expected with the
lower prices due to the higher moisture with an even mix of storing, basis
contracts or just flat pricing it."
Keith Brandt, general manager of Plains, Grain and Agronomy in Enderlin,
North Dakota, said: "About 5% of our soybeans are waiting to be harvested, and
we need frozen ground to get the majority that are left. Our yields are off 10
bpa (bushels per acre) to 12 bpa from last year and it took a good field to
average over 40 bpa. The low areas were thinned out from too much rain through
the growing season. We dried about 95% of the beans that we have dumped. It is
tough to get anyone to sell 2020 harvest delivered beans, but we are at levels
that our best-priced contracts for 2019 harvest delivery are."
I checked in with Lyn Wessel who farms in Watonwan County, Minnesota,
mid-August to hear how his crop looked as southern Minnesota was getting beat
up by rain and storms most of the summer. "I already had 20% drowned out on two
fields, plus early hail damage," said Wessel. When I asked him before
Thanksgiving how harvest was going, he said, "considering my beans were planted
the second week of June with a 290HP track tractor pulling a 20-foot drill on
soil not even close to fit, they were better than expected at 44 bpa to 50 bpa
verse 60 bpa to 70 bpa normally."
Peter Ness, Ness Farms, Sharon, North Dakota, said: "What started out with a
promising crop of soybeans when we started harvest on Sept. 24, went south in a
hurry. We had daily rains and muddy fields that gave away to an Oct. 9 through
Oct. 11 blizzard, which dropped 20 inches of snow on top of the already
saturated soil. November came and the ground finally froze hard enough for
combine and grain cart travel, but the damage was obvious. One-third of the
bean crop had been lost to lodging, pods breaking open and plants just snapping
off, with plants frozen in the water. In addition, all the beans came off the
field wet at 14% to 18% moisture. We finally finished the beans on Nov. 9 and
moved on to what was left of our sunflower crop."
"We had a pretty decent soybean harvest and appreciated the beans we had
above the Missouri River flooding," said Quentin Connealy, Tekamah, Nebraska.
"Mid-May planted beans, which were put in before the long, wet spell, performed
very well. Seed treatment proved to help their emergence during the wet spell
and it showed during harvest. Many beans were planted June 8-10 in this area,
and they were impressive considering how late they were planted and our dry
spell after a wet spring. Most ended up being in the 52 bpa to 58 bpa range,
which impressed me.
"Harvest went fairly smooth with not many rain days; maybe only a day or
two. Nevertheless, short days with tough beans in the morning made it feel like
a long soybean harvest. We started soybean harvest a little late on Oct. 15,
which we usually start up around the end of September to beginning of October.
We finished up soybean harvest Oct. 19, a touch late for the area," added
Connealy.
"We started soybean harvest a little later than usual because we planted
late and everything was behind," said Doug Saathoff, West Fork Farms Inc.,
Trumbull, Nebraska. "We got rolling around the 25th of September and finished
up with soybeans on the 15th of October. We had some rain delays in there, but
overall, the weather wasn't too bad. Our yields were down significantly from
previous years. I would say they were down 20% to 30%. It was disappointing to
see that, because they did look good all summer. Some fields did receive some
hail and wind in August, but the biggest reasons yields were down was too much
rain over the summer, lack of sunlight and too cool during August.
"Beans like dry feet and sunshine, and we definitely did not have that this
summer in my area," added Saathoff, who is a director on the Nebraska Soybean
Board and the Nebraska Rural Radio Board.
"As far as harvest went, I'm almost afraid to say because I know of all the
struggles others went through in other areas, but we had a pretty good harvest
here in southwest Iowa," said Mike Carlson, Red Oak, Iowa. "We didn't have too
many weather delays like 2018, thankfully, because I don't think I could have
handled another fall like that. I didn't even get stuck this year! Once again,
I expected the beans to be better than they were; however, our beans did yield
a few bushel better than a year ago, which puts them a little better than the
five-year average."
Tim Dufault, who farms in Crookston, Minnesota, told me empathically,
"Soybean harvest 2019 sucked! It was 31 days from start to finish. We only
actually harvested 13 of those days, and some of those days might have been
only one load or one round in the field. We received over 10 inches of rain in
September and October. That is over half our annual precipitation. The early
cold temperatures helped with harvest because frozen ground was the only way
the crop was going to get harvested.
"Despite all the weather troubles, yields overall were good. I have heard
yield reports from the upper 30s to low 50s bushels per acre. However, the
beans came off wet and we saw many at 14% to 15% moisture. One quality issue
that popped up in a few locations in my area was discolored beans. No one is
sure yet as to why, but the thought is that those varieties were susceptible to
some viral or bacterial infection," added Dufault.
"Every single farmer I have talked to within a large radius of my area says
this was the worst fall harvest season. Every crop was a struggle; from wheat
to dry edible beans, sugarbeets, potatoes, sunflower to corn," added Dufault.
"This was one of the more difficult soybean harvests I can remember (not to
be confused with the difficult spring wheat harvest of August through September
or the difficult corn harvest of November through to be determined)," added
Wagner. "Harvest 2009 was also an extremely tough year and has been a swear
word around here ever since, but I think 2019 will replace it now."
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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Electronic Logging Device Challenged as Final Compliance Date Nears
The final deadline for truckers to comply with the electronic logging device
rule is fast approaching but continues to face opposition from certain trucking
groups.
It has been two years since the still-controversial electronic logging
device (ELD) rule took effect, and the final date for 100% compliance is Dec.
16. That means that unless the Federal Motor Carrier Safety Administration
(FMCSA) has allowed any commercial motor vehicles (CMV) an exemption, all
commercial vehicles traveling on the roads in the U.S. must meet the deadline.
Here is a link to the current exemptions and waivers:
https://www.fmcsa.dot.gov/hours-service/elds/electronic-logging-device-eld-exemp
tions-and-waivers.
Of note is that, in the agriculture sector, transporters of livestock and
insects are currently not required to have an ELD.
"The statutory exemption will remain in place until further notice," notes
the FMCSA. "Drivers do not need to carry any documentation regarding this
exemption."
Remember, the ELD and hours of service (HOS) rules intertwine, with the HOS
rule being the most contentious for not just the trucking industry, but also
for safety advocates as well.
Once the driving time expires when the HOS limit is reached, the ELD doesn't
shut the truck down, but it alerts the driver that they are violating the rule
if they continue to drive. If they the driver is found in violation, the truck
and driver could face being taken out of service. The out-of-service criteria
(OOSC) associated with the ELD mandate went into effect on April 1, 2018, for
anyone not exempt from compliance. The out-of-service criteria provides uniform
enforcement tolerances for roadside inspections to enforcement personnel
nationwide, including FMCSA's state partners.
One group in particular, the Small Business in Transportation Coalition
(SBTC), has been protesting the ELD rule as it relates to all motor carriers
with fewer than 50 employees, including (but not limited to) one-person private
and for-hire owner/operators of commercial motor vehicles used in interstate
commerce. The SBTC had applied for an exemption, but was officially denied on
July 17, 2019. On Oct. 29, the FMCSA noted on the Federal Register that the
SBTC had asked the FMCSA to reconsider their application for exemption from the
ELD.
The FMCSA noted in the Federal Register that it is requesting public comment
on SBTC's application for reconsideration through Nov. 29.
https://www.govinfo.gov/content/pkg/FR-2019-10-29/html/2019-23561.htm
SBTC President James Lamb said in an Oct. 24 news release on the
organization's website that he had taken the matter to Congress in reaction to
the Oct. 22, 2019, release of 2018 large-truck fatality data reported by
USDOT's National Highway Traffic Safety Administration (NHTSA). That study
revealed more truckers died in accidents last year than at any time in the last
30 years.
In a letter to Sen. Roger F. Wicker, R-Miss., chairman of the U.S. Senate
Committee on Commerce, Science and Transportation, and Rep. Peter A. DeFazio,
D-Ore., chairman of the House Committee on Transportation and Infrastructure,
Lamb wrote: "Although NHTSA's release title is intended to highlight a general
decrease in highway fatalities, the news is not so good for trucking.
Large-truck fatalities increased yet again 0.9% in 2018. This is on top of an
increase of at least 4.9% in 2017, the year the ELD mandate went into effect."
Lamb noted that USDOT previously reported truck fatalities for 2017
increased 9%. However, "The Department has now removed from this statistic some
pickup trucks from the large-truck category, which, when combined with a
trailer, still constitutes commercial motor vehicles over 10,000 pounds,
calling into question whether they are trying to skew the results to achieve a
lower increase in fatality percentage."
Lamb believes the cause of the increased fatality rate can be attributed to
truck drivers recklessly speeding to try to "beat the clock." The FMCS website
report titled "Roadside Inspections, Driver Violations" notes that, so far this
year in the U.S., speeding is the No. 1 violation. If you read down the list,
you will also see infractions related to ELDs. You can change the date at the
top to also show comparisons from previous years:
https://ai.fmcsa.dot.gov/SafetyProgram/spViolation.aspx?rpt=RDDV.
SBTC responded to the 2018 NHTSA report posted on the FMCSA's Facebook page
on Oct. 22, saying: "Why are you misleading the public when you know your own
data published yesterday showed an INCREASE once again in large truck
fatalities? Have you no Honor or shame, FMCSA? This is false, deceptive and
misleading."
Also responding on the FMCSA Facebook post was Truckers.com, saying: "How
about you come clean and tell the truth. More truckers died in accidents last
year than at any time in the last 30 years, according to a new report by the
USDOT's National Highway Traffic Safety Administration. You're killing us with
these ELDs. So much for saving 26 lives. How about you do the right thing and
issue an ELD suspension order now that the facts show ELDs were one big
mistake?"
On Oct. 25, the SBTC created a WhiteHouse.gov petition asking for the U.S.
government to intervene to suspend current ELD regulations:
https://petitions.whitehouse.gov/petition/immediately-suspend-electronic-logging
-device-eld-rule?fbclid=IwAR2_gbvX5QnvAQ5DgminfFbyMB72_xs-KQpik_cEw1-HtaMF57s4G6
JnXLE.
SBTC also called on truck drivers nationwide to join the group in
publicizing its #SuspendELDsNow hashtag on social media.
https://myemail.constantcontact.com/USDOT-Large-Truck-Fatality-Data-released-tod
ay-show-ELDs-are-killing-more-people--not-saving-lives-at-promised-by-FMCSA.html
?soid=1129065728034&aid=4TIKq2pPt-s
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DTN Weekly Average DDG Price Firm
OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average
spot price from the 40 locations DTN contacted was steady at $143 per ton for
the week ended Nov. 21. Prices were firm this week in spite of weaker corn
futures not pulling prices down thanks to the strong corn basis.
Wednesday's Energy Information Administration ethanol report showed ethanol
inventory in the U.S. was drawn down again last week, falling to the lowest
stocks level in more than 2 1/2 years despite a decline in ethanol demand and
higher output, with ethanol production up for an eighth week.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Nov. 21 was at 108.66%. The value of DDG relative to
soybean meal was at 47.51%. The cost per unit of protein for DDG was $5.30,
compared to the cost per unit of protein for soybean meal at $6.34. The
DDG-to-soymeal price ratio continues to remain above the three-year average.
In its weekly export DDGS update, the U.S. Grains Council noted: "The U.S.
DDGS market is mixed this week with merchandisers reporting active trade on
Thursday. Barge CIF NOLA* and FOB* NOLA values are firmer (up $1-$3 per metric
ton) versus last week while rail-delivered prices are $3/mt lower, on average.
Some merchandisers report that the Canadian National Railway strike is
affecting logistics and prices for some locations.
"Overseas buyers have been actively securing U.S. DDGS and prices are firmer
for most destinations. Prices for DDGS shipped to Indonesia and South Korea are
showing the strongest gains, up $5-$6/mt. The average price increase for
product destined for Southeast Asia is up $2/mt this week to $240 for December
shipment," said USGC.
* 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 11/21/2019 11/14/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $155 $155 $0
Wet $78 $78 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $160 $150 $10
Wet $80 $77 $3
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $135 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $150 $150 $0
South Dakota Dry $125 $125 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $140 $150 -$10
Iowa Dry $137 $137 $0
Michigan Dry $135 $135 $0
Minnesota Dry $137 $135 $2
Missouri Dry $155 $155 $0
Ohio Dry $145 $150 -$5
South Dakota Dry $145 $145 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $55 $55 $0
Illinois Dry $153 $153 $0
Nebraska Dry $150 $150 $0
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $145 $0
Indiana Dry $145 $145 $0
Iowa Dry $145 $145 $0
Michigan Dry $140 $140 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
New York Dry $165 $165 $0
North Dakota Dry $135 $135 $0
Ohio Dry $150 $150 $0
South Dakota Dry $135 $135 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas
Indiana Dry $150 $150 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $145 $145 $0
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
California Dry $208 $208 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $214 $211 $3
*Prices listed per ton.
Weekly Average $143 $143 $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 11/21/2019 $3.6850 $131.61
Soybean Meal 11/21/2019 $301.00
DDG Weekly Average Spot Price $143.00
DDG Value Relative to: 11/21 11/14
Corn 108.66% 106.56%
Soybean Meal 47.51% 47.18%
Cost Per Unit of Protein:
DDG $5.30 $5.30
Soybean Meal $6.34 $6.38
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
2019 Beet Harvest Over: Frozen Sugarbeets Left to Rot in Upper Midwest
The 2019 sugarbeet harvest in the Red River Valley ended on Nov. 9 when
American Crystal Sugar Company (ACSC) was no longer able to continue taking
frozen beets to process, leaving farmers with unharvested beets, some of which
will stay in the field and rot over the winter.
American Crystal Sugar Company is an agricultural cooperative corporation
owned by approximately 2,800 sugarbeet growers in the Minnesota and North
Dakota areas of the Red River Valley. The Red River Valley forms a band
approximately 35 miles wide on either side of the North Dakota and Minnesota
border and extends approximately 200 miles south from the border of the United
States and Canada, according to the company website. The company purchases all
of its Red River Valley sugarbeets from members under contract with the company.
American Crystal is the largest beet sugar producer in the United States and
has two locations in eastern North Dakota, three in northwestern Minnesota and
one plant in northeastern Montana. The company, through its wholly owned
subsidiary Sidney Sugars Incorporated, owns and operates a sugarbeet processing
facility in Sidney, Montana, which processes nonmember sugarbeets from
approximately 30,000 acres.
The nonstop rains at the end of September and into October caused muddy
conditions at the start of harvest; after it snowed, the melted snow just added
more water to the ground. When the freeze came, many of the sugarbeets were
frozen in the ground. Matthew Krueger, an East Grand Forks, Minnesota, grower
told me ACSC sent a text to member growers on Nov. 3 that frozen beet quotas
had been removed in all districts, and growers could deliver any frozen beets
that were mud free. He said by Nov. 9, another text came saying that ACSC was
ending harvest of all beets because of poor beet conditions, along with high
levels of mud and leaves, making them uneconomical to process.
I spoke with Krueger while he was combining soybeans and he told me his
harvest ended early in November after realizing the beets he was harvesting
were too full of mud chunks, making it harder for ACSC to process. "We had to
leave a significant portion of our beets in the ground, unable to finish the
long, at times difficult, harvest," said Krueger.
It is important to note that the root of the sugarbeet is what contains the
high concentration of sucrose and is grown commercially for sugar production.
As Knutson pointed out, his unharvested beets will become cattle feed this year
and that consists of just the roots, not the tops.
Wikipedia notes that, "The root of the beet contains 75% water, about 20%
sugar and 5% pulp. The exact sugar content can vary between 12% and 21% sugar,
depending on the cultivar and growing conditions. Sugar is the primary value of
sugarbeet as a cash crop. The pulp, insoluble in water, is mainly composed of
cellulose, hemicellulose, lignin, and pectin, is used in animal feed. The
byproducts of the sugarbeet crop, such as pulp and molasses, adds another 10%
to the value of the harvest."
Krueger said that in years where there is an early freeze, a sugarbeet can
thaw and "heal itself," but will lose some sugar content. This fall, after the
heavy rains, muddy fields and then a freeze, the beets were unable to recover.
He said the ACSC actually took in close to 1 million tons of frozen beets, but
some of the beets began to rot, and the excess chunks of mud became
problematic.
"As co-op members, the amount of sugarbeets a grower is expected to deliver
to ACSC depends on how many shares they own," Krueger said. "One share plants
0.8 acres and in my case, I grow about 680 acres of sugarbeets." Krueger
estimates that there may have been as much as 65% of the harvest lost in parts
of the Red River Valley.
"Our contract does have act of God in there, but it also has clauses in
there that if unable to deliver beets, you may be obligated for fixed costs,"
said Krueger. "That cost for this year has been set at $343 per acre by ACSC
for the unharvested acres."
I asked Krueger about how much crop insurance will pay, and he said, "For
simple math, insurance will pay for 60% of what I could have made on our beets.
But, input costs are roughly 60%, so the fee puts us in the red. It also
depends on how high your cost of production is, and it can vary several hundred
dollars between growers. One thing to note is as shareholders we are paying in
in order to keep the co-op financially sound."
Krueger said his beets left in the field will be left to rot until spring
and that he will use a rotary beater to chop the greens off the top before
then. Krueger also grows corn and soybeans and will rotate one of those crops
in to that field next spring. He also noted that spring wheat could work, but
next year may be rough where beets had rotted. He said although other growers
do rotate wheat in, in his opinion, corn is the best choice. His rotation on
beets is three years. "I have a 3,000 acre farm so I am always rotating," added
Krueger.
USDA LOWERS PRODUCTION
In the Nov. 15 Sugar and Sweeteners Outlook Projected, USDA Economic
Research Service noted that U.S. sugar production for 2019-20 was reduced, as
both cane sugar and beet sugar production were lowered based on most recent
crop data. "Domestic deliveries for 2019-20 were reduced as well, based on
lower forecast totals than previously reported for 2018-19. Reported ending
stocks by domestic processors and refiners for 2018-19 resulted in an ending
stocks-to-use ratio of 14.5%. Projected sugar exports are down from the
previous month, as the availability of fewer supplies is expected to reduce the
volume of shipments to non-U.S. markets."
USDA said production for 2019-20 has been hampered by cold, wet weather
conditions in most of the key sugarbeet producing regions during the harvest
season. Through Nov. 3, the national sugarbeet harvest was only 70% complete
and the slowest pace on record since 2000. This was mainly due to record-slow
harvest progress made in Minnesota (70%), North Dakota (67%) and Michigan
(55%).
"At the time of the WASDE release, growers were still contending with
freezing temperatures and wet soil conditions, which can hinder growers'
ability to get in the field, harvest sugarbeet roots from the soil, and provide
healthy, clean beets that can be stored and processed during the winter and
spring slicing season. The likelihood of unusually high levels of sugarbeets
being left unharvested has been increasing as winter conditions continue in
those states," noted USDA.
"The reduction is primarily in Minnesota and North Dakota, the first and
third largest sugarbeet producing states. The reduction is due to lowered
harvested area forecasts, currently at 971,000 acres -- an 11.3% reduction from
the October forecast. If realized, this would be the lowest harvested acreage
total since 1960-61." Here is a link to the entire Nov. 15 report:
https://usda.library.cornell.edu/concern/publications/pv63g024f?locale=en
On Nov.18, USDA announced it intends to take appropriate actions to ensure
an adequate supply of sugar to the U.S. market as prospects for U.S. sugar
production have declined significantly due to adverse weather in sugarbeet and
sugarcane regions. With a 10.5% ending stocks-to-use ratio forecast for fiscal
year 2020, USDA will be addressing options in the near future in order to
stabilize U.S. sugar supplies. USDA noted that it intends to make an
announcement between Nov. 18 and Dec. 10 as to quantity, type and source of
additional sugar needed to ensure an adequate supply for the domestic market,
avoid forfeitures and prevent or correct market disruptions.
To say the 2019 sugarbeet season has been rough is putting it mildly.
Knutson said, "Yes, the struggles were real and took their toll on growers. No
ton came through the gate that did not have sweat and blood involved. Many went
above and beyond what was expected to get the crop in." Knutson added that
during this growing season "we had snow, rain, frost, flooding and a freeze;
about the only thing we didn't have was locusts."
He was, of course, referencing one of the seven plagues listed in the bible
in Exodus 10:1--20. Basically, the prophecy is that locusts would swarm Earth
and eat away all of the plants leaving nothing. Knutson's comment gives a
pretty good indication of just how bad the 2019 sugarbeet harvest season was
for many growers.
ACSC is holding factory district meetings the week of Nov. 18 to inform
growers what to expect this winter, added Knutson.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DTN Weekly Average DDG Price Higher
OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly average
spot price from the 40 locations DTN contacted was $2 higher at $143 per ton
for the week ended Nov. 14.
Prices were mixed, but the weakness in the cash corn price has been balanced
once again by stronger basis values in some areas where corn harvest is slow or
stalled. The onset of early, record cold temperatures also added to feed
demand.
The Energy Information Administration data released Thursday morning showed
ethanol inventory fell for the third time in four weeks and to the lowest level
in over two years despite a seventh straight weekly gain in ethanol plant
production.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Nov. 14 was at 106.56%. The value of DDG relative to
soybean meal was at 47.18%. The cost per unit of protein for DDG was $5.30,
compared to the cost per unit of protein for soybean meal at $6.38. The
DDG/soymeal price ratio continues to remain above the three-year average.
In its weekly export DDGS update, the U.S. Grains Council noted: "The U.S.
DDGS market is higher this week while international prices are slightly lower
for spot shipments. Barge CIF (cost, insurance and freight paid by seller) NOLA
(New Orleans)prices are $6 to $9 per metric ton (mt) higher while FOB (free on
board means buyer pays costs of ocean freight, insurance, unloading, and
transportation from originating port) NOLA DDGS are up $3 to $4/mt. U.S. rail
rates are $4/mt higher on average with this week's winter storm complicating
logistics."
USGC also noted that internationally, merchandisers report Indonesia and
Vietnam remain active buyers with several shipments secured for December and
January. "South Korean buyers have reportedly been looking for product but bids
from that country are below firm asking prices. On average, 40-foot containers
to Southeast Asia are down $1/mt for December shipment while deferred positions
are steady."
ALL PRICES SUBJECT TO CONFIRMATION CURRENT CURRENT CHANGE
COMPANY STATE 11/14/2019 11/7/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $155 $153 $2
Wet $78 $77 $1
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $150 $150 $0
Wet $77 $77 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $135 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $150 $150 $0
South Dakota Dry $125 $125 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $148 $2
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $150 $0
Iowa Dry $137 $137 $0
Michigan Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Missouri Dry $155 $155 $0
Ohio Dry $150 $150 $0
South Dakota Dry $145 $145 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $142 $8
Wet $55 $55 $0
Illinois Dry $153 $150 $3
Nebraska Dry $150 $142 $8
Wet $60 $45 $15
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $140 $5
Indiana Dry $145 $140 $5
Iowa Dry $145 $135 $10
Michigan Dry $140 $145 -$5
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $140 $10
New York Dry $165 $165 $0
North Dakota Dry $135 $135 $0
Ohio Dry $150 $145 $5
South Dakota Dry $135 $135 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas
Indiana Dry $150 $135 $15
Iowa Dry $135 $145 -$10
Minnesota Dry $135 $140 -$5
Nebraska Dry $145 $135 $10
Ohio Dry $150 $145 $5
South Dakota Dry $140 $135 $5
California Dry $208 $205 $3
Western Milling, Goshen, California (559-302-1074)
California Dry $211 $211 $0
*Prices listed per ton.
Weekly Average $143 $141 $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 11/14/2019 $3.7575 $134.20
Soybean Meal 11/14/2019 $303.10
DDG Weekly Average Spot Price $143.00
DDG Value Relative to: 11/14 11/7
Corn 106.56% 105.21%
Soybean Meal 47.18% 46.13%
Cost Per Unit of Protein:
DDG $5.30 $5.22
Soybean Meal $6.38 $6.43
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
******************************************************************************
As Harvest Drags On, Producers Reminded to Cool Stored Grain
Many Midwest farmers faced a late-planting season with the added headache of
poor summer growing weather, excessive rainfall and in some states early
snowfall stalling harvest. However, things got worse at harvest, which has been
moving almost at a snail's pace. This presented a new headache for many, with
probably the biggest issue being wet corn.
The USDA reported that as of Nov. 3, corn harvest reached 52% and still 10
days behind average. Minnesota, Iowa and Kansas did see some progress for that
week, but North Dakota was only at 10% done, three weeks behind average and the
least amount harvested for this date in 2009.
Many farmers have been storing this year's harvest in their on-farm bins,
likely after having to dry it down. But many university extension offices are
reminding farmers not to ignore the corn after binning and to be sure to keep
it cool. "A good rule of thumb is to cool grain any time the average air
temperature is around 20 degrees Fahrenheit (F) cooler than the grain
temperature. Repeat this cooling cycle until the grain temperature is 30 to 40
degrees F for winter storage. This storage temperature minimizes insect
activity and mold growth in the stored grain. Cooling grain below 30 degrees F
has little added benefit and can cause ice to form in the grain. Air humidity
makes little difference when cooling grain," Kristina TeBockhorst and Shawn
Shouse of Iowa State University said in a Nov. 4 blog published by the
University of Minnesota Extension.
The blog noted that the hours required for cooling the whole bin can be
estimated as 15 divided by the cubic feet per minute of airflow per bushel of
grain in the bin (cfm/bu). If you don't know how much airflow per bushel your
fan provides, you can estimate it using the calculator provided by the
University of Minnesota at this link: https://bbefans.cfans.umn.edu/
"The key at-harvest activities are cooling as fast as possible and drying as
rapidly as drying systems will allow," noted a Nov. 4 blog from the University
of Minnesota Extension.
HAULING WET CORN CAN BE COSTLY
Many farmers don't have the room to store their corn on farm and will need
to haul it to their local elevator for drying, which will add costs to the
farmer and lower their final price for their corn. See Iowa State Extension's
article "Corn Drying and Shrink Comparison" at
https://www.extension.iastate.edu/agdm/crops/html/a2-32.html
However, some elevators have extended their wet corn allowance in order to
get farmers to bring new crop bushels to them. The norm for the start of drying
charges is that corn sold via contract is 15.1% and higher, but corn sold for
storage is at 14.1% or higher. To give you an idea of the added cost to a
farmer, here is a typical drying discount schedule, this one from Beardsley
Farmers Elevator Company, Beardsley Minnesota:
http://s3.amazonaws.com/media.agricharts.com/sites/1530/discounts/CornDiscounts2
019.pdf
Archer Daniels Midland Company waived grain drying charges below 19% at
three of its processing locations to keep their plants running. In a statement
provided to Brownfield News on Nov. 8, ADM said they are not charging farmers
to dry corn unless it is above 19% moisture at their corn-wet mills in Cedar
Rapids and Clinton, Iowa, and Decatur, Illinois.
However, wet corn will need to be handled differently by processors. When I
was a corn buyer at an ethanol plant in Wisconsin, we only took wet corn to
17.5% moisture if we were desperate for corn to grind. We put wet corn in the
"day" bin so the corn didn't sit around for long and was used immediately. When
the corn is above 16.5%, the hammer mills (they grind the incoming corn) can
gum up and the plant manager is quick to make a call to the corn buyer noting
the mess that was made. On top of that, wet corn can contaminate a bin if it
makes it to the larger storage bin, so it needs to be used right away.
While some farmers will leave their corn in the field over the winter,
especially if space is tight and the corn is wet, there are considerations that
need to be weighed when doing so. North Dakota State University Extension
Service grain drying expert Ken Hellevang noted to make sure corn stalks and
cob shanks are strong if considering leaving high-moisture corn in the field
over winter. "Field losses can range from minor to severe. Compare the cost of
drying versus losses associated with leaving the corn in the field. In
addition, standing corn tends to slow soil drying in the spring, which may
delay planting."
The biggest problem now facing Midwest farmers is a propane shortage related
mostly to logistics issues, causing a lack of physical supply in some parts of
the Midwest. Much of the shortages have been seen in Iowa and Minnesota, but a
farmer from western Illinois said on social media Nov. 9 that his local co-op
officially decided not to haul any more propane to grain dryers for the time
being.
So, the headaches continue.
For the latest update on propane shortages in parts of the Midwest by DTN
Staff Reporter Todd Neeley, see:
https://www.dtnpf.com/agriculture/web/ag/news/article/2019/11/07/propane-demand-
outstripping-pipeline
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 average
spot price from the 40 locations DTN contacted was slightly higher at $141 per
ton for the week ended Nov. 7.
Prices are mixed from various sellers again this week, but the weakness in
the cash corn price due to lower futures this past week is starting to put some
pressure on prices. As the cold weather season has come earlier this year,
feeders will be coming to the market for more product and DDG prices will need
to remain competitive.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Nov. 7 was at 105.21%. The value of DDG relative to
soybean meal was at 46.13%. The cost per unit of protein for DDG was $5.22,
compared to the cost per unit of protein for soybean meal at $6.43.
In its weekly export DDGS update, the U.S. Grains Council noted: "Following
last week's gains barge CIF (cost, insurance and freight paid by seller) NOLA
(New Orleans, Louisiana) prices and FOB (free on board means buyer pays costs
of ocean freight, insurance, unloading, and transportation from originating
port) Gulf offers were slightly lower. Other quoted routes, including U.S. rail
rates, are unchanged. Merchandisers report that inquiries and bids from
Southeast Asia are continuing to firm but the bid/ask spread remains wide. The
average prices for 40-foot containers to Southeast Asia is up $1 per metric ton
(mt) to $240 per mt after increases were noted for shipments to Malaysia and
Vietnam."
The U.S. Census Bureau reported this past week that U.S. exports of DDGS
totaled 1,045,775 mt in September, down from 1,117,501 mt in August, but up 2%
from a year ago. Mexico was the top destination in September, taking 13% U.S.
exports, followed by Vietnam, Turkey, South Korea and Japan. In the first nine
months of 2019, U.S. exports of distillers grains are down 6% versus one year
ago.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 11/7/2019 10/31/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $153 $153 $0
Wet $77 $77 $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $150 $150 $0
Wet $77 $77 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $135 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $150 $150 $0
South Dakota Dry $125 $125 $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 $150 $145 $5
Iowa Dry $137 $140 -$3
Michigan Dry $135 $135 $0
Minnesota Dry $135 $137 -$2
Missouri Dry $155 $148 $7
Ohio Dry $150 $150 $0
South Dakota Dry $145 $148 -$3
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $142 $142 $0
Wet $55 $55 $0
Illinois Dry $150 $147 $3
Nebraska Dry $142 $135 $7
Wet $45 $45 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $145 $145 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $140 $140 $0
New York Dry $165 $165 $0
North Dakota Dry $135 $135 $0
Ohio Dry $145 $145 $0
South Dakota Dry $135 $135 $0
Wisconsin Dry $135 $135 $0
Valero Energy Corp, San Antonio Texas
Indiana Dry $135 $135 $0
Iowa Dry $145 $145 $0
Minnesota Dry $140 $140 $0
Nebraska Dry $135 $135 $0
Ohio Dry $145 $145 $0
South Dakota Dry $135 $135 $0
California Dry $205 $205 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $211 $211 $0
*Prices listed per ton.
Weekly Average $141 $140 $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 11/7/2019 $3.7525 $134.02
Soybean Meal 11/7/2019 $305.60
DDG Weekly Average Spot Price $141.00
DDG Value Relative to: 11/7 10/31
Corn 105.21% 100.51%
Soybean Meal 46.13% 45.99%
Cost Per Unit of Protein:
DDG $5.22 $5.19
Soybean Meal $6.43 $6.41
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
******************************************************************************
Corn Futures: A Look at Bullish, Bearish Influences
As we are in the midst of one of the most challenging planting, growing and
harvesting years on record, and as we grapple with newly revamped trade deals,
I wanted to take a new look at the corn market.
While many farmers and grain analysts have, throughout 2019, postulated on
the potential for a sharp decline in corn yield, production and acreage, USDA
has surprised us with not-so-disastrous numbers on each successive report;
we'll find out in the latest World Agricultural Supply and Demand Estimates
(WASDE) on Friday, Nov. 8, if that changes. But following heavy snows and too
much rain in parts of the Western Corn Belt and Northern Plains -- and recent
freeze events on a crop that has lagged badly in maturity -- perhaps the true
effect will not be completely realized until the final crop numbers are
revealed in January.
With December corn futures now sitting just 23 cents per bushel above the
contract low -- 98 cents under the June high -- where is this market going and
what are the factors driving it?
Here is a look at some, but certainly not all, of the bullish and bearish
ingredients that may influence corn trade.
BULLISH
-- Managed funds, as we approach the Nov. 8 WASDE report, are estimated to
still carry a net short of close to 165,000 contracts or 825 million bushels
(mb).
-- The third slowest U.S. corn harvest on record could lead to surprising
declines in yield, production and acreage, as frequent snow, rain, high winds
and freezes may have negatively affected corn, especially in the Northern
Plains.
-- USDA will revise both North Dakota and Minnesota acreage downward in the
Nov. 8 report.
-- The U.S. corn basis, especially in the Eastern Corn Belt, is the
strongest in years. Farmer selling has been lighter than usual with on-farm
storage more than adequate. (Short-term bullish only.)
-- The recent trade deal with Japan, along with the prospect of a new USMCA
trade pact (expected by Thanksgiving) with Canada and Mexico, could increase
export quantities of corn or byproducts to these countries.
-- The new U.S.-China trade agreement may be signed by late November and
could possibly include China sorghum, ethanol and DDG imports in addition to
corn imports. China's feed grain supplies are supposedly very tight.
-- Until recently, Brazil has been very dry on a historical basis in
September and October 2019, but rains appear to be picking up for November.
Failure to get the normal rainy season, as planting has been delayed, may lead
to lower second crop corn (safrinha) acres.
-- World corn carryout for 2019-20 is expected to fall to the lowest level
in five years at 299.5 million metric tons (mmt), according to the average
trade estimate. This compares to 324 mmt in 2018-19 and 341.3 mmt in 2017-18.
-- Although Brazilian corn production is pegged at a hefty 103 mmt for this
coming year, Argentine corn acreage is expected to decline 6% and production to
fall to 46.5 mmt, down 3.5 mmt. Argentina potentially faces much higher grain
export taxes under their new president.
-- The November to the final U.S. corn production numbers has seen a decline
in five of the past six years. If November corn production is lower, as many
expect, then we can assume January will also be lower, as freeze, wind, snow
damage and abandonment becomes more quantifiable.
-- The Dow Jones' survey of analysts suggests both corn yield, production
and acreage on the Nov. 8 WASDE will be lower. Corn yield is estimated at down
1.1 bushels per acre (bpa), with harvested acreage falling by 500,000 and
production dropping by 177 mb.
-- In their recent baseline projections, USDA projects a sharp rise in feed
and residual use as meat exports are predicted to rise and the number of
animals on feed remains large.
BEARISH
-- U.S. corn demand is the slowest since 2012, with export sales running 47%
behind last year, and export inspections down over 62% from a year ago.
-- USDA can be expected to drop exports by 100 mb in November and ethanol
usage by 25 mb on weak demand, further adding to ending stocks.
-- U.S. ending stocks of corn, currently pegged at 1.929 billion bushels
(bb) for 2019-20 could rise close 2.1 bb if the above cuts happen and yield and
production doesn't decline.
-- USDA's baseline numbers for 2020-21 suggest acreage will increase by 4.5
million acres (ma) to 94.5 ma. With a yield of 178.5 bpa, ending stocks could
go to a burdensome 2.754 bb next season, even with an increase of close to 600
mb in feed/residual use and exports. Other private acreage estimates are close
to 96 ma.
-- Brazil looks to raise a large crop estimated to be 103 mmt, while Ukraine
had a record large corn crop of 36 mmt.
-- Ethanol margins beyond November are called at breakeven or worse,
suggesting lower corn usage.
-- There is potential for large pockets of feed grade wheat to compete
domestically with U.S. corn demand.
-- Argentina, Brazil and Ukraine are expected to continue to provide very
stiff competition into 2019, unless, with respect to Argentina, export taxes
are increased. Those three countries in 2019-20 will export an estimated 97.5
mmt compared to U.S. at just 48.3 mmt. Compare that to 2017-18 when those three
exported just 64 mmt versus 62 mmt from the U.S.
CONCLUSION
These are a few of the factors that may go into corn futures prices in the
weeks ahead. Mother Nature, macroeconomic forces and currency gyrations are
tough to predict, and they can all affect corn prices. While corn stocks are
certainly moving in the right direction -- with the lowest world stocks in five
years -- the U.S., South America and the Black Sea are still awash in corn. In
the U.S. (if the USDA baseline projections are to be believed,) it would appear
that -- given good weather -- we will have plentiful supplies for 2020-21 and
years to come. The rise in corn acreage for 2020-21 is a given following the
prevented plantings and abandoned acreage of 2019.
As burdensome as supplies look to be next year and beyond, it is demand that
may continue to be a real challenge for U.S. corn. South American and Black Sea
farmers and exporters continue to ramp up crop production and infrastructure to
export those crops, as their percentage of world exports continues in an upward
trajectory.
While we await the WASDE report on Nov. 8, it may be prudent to set a plan
to market some corn -- both remaining old crop and new crop -- in the event of
a bullish report. Granted, the report could be bullish and the potential for a
new U.S.-China and USMCA trade deal could be supportive to corn, but the
current demand pace suggests USDA is far overstating U.S. export demand.
With the prospect for a huge acreage increase in 2020-21 and a monstrous
ending stocks number (with good weather), there is little for corn bulls to get
excited about. A rally to $4.00 to $4.10 on old- or new-crop December futures
could warrant some aggressive sales.
**
Comments above are for educational purposes and are not meant to be specific
trade recommendations. The buying and selling of grains and grain futures
involve substantial risk and are not suitable for everyone.
Dana Mantini can be reached at dana.mantini@dtn.com
Follow Dana Mantini on Twitter @mantini_r
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