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Market Matters Blog           06/17 11:20
Flooding Keeps Chokehold on Barge Traffic, Stalling Grain Shipments
DTN Weekly DDG Average Price Strengthens
HRW Wheat Begins New Crop Year
Bonus Target Contract: A Marketing Alternative Fit for the Current Environment
Barge Traffic Stalled by Historic Flooding on Mississippi River System
DTN Weekly DDG Average Price Sharply Higher
DTN Weekly DDG Average Price Higher
Lower Mississippi River Still in Flood Stage; Barge Movements Remain Slow
DTN Weekly DDG Average Price Steady
US Surface Transportation Board Getting Back on Track

******************************************************************************
Flooding Keeps Chokehold on Barge Traffic, Stalling Grain Shipments

   The long, record-breaking flooding of 2019 on the Mississippi River system 
has taken a toll on farmland, personal property and the many cities and towns 
that line the rivers. It has also disrupted commerce on the rivers that depends 
on barges to move product, especially fertilizer, grain and oilseeds, to and 
from the Gulf of Mexico and other points along the way.

   Only 12 barges have made it to St. Paul, Minnesota, the northernmost point 
on the Upper Mississippi River, so far this shipping season. The Motor Vessel 
Aaron F. Barrett, pushing 12 barges heading to St. Paul, Minnesota, locked 
through Lock and Dam 2 near Hastings on April 24. Since then, flooding and 
ensuing lock closures have kept most of the entire Upper Mississippi River 
closed. Most recently, the closure of the St. Louis Harbor shut down barges 
from moving up or downriver through there.

   Upper Mississippi River Locks 11 through 27 from the Illinois-Wisconsin 
boarder to St. Louis have been closed on and off over the past three months due 
to flooding conditions. As of June 16, the United States Army Corps of 
Engineers (USACE) reported Lock and Dam 24, Lock and Dam 25, Mel Price Locks 
and Dam, Locks 27 and Costello Lock and Dam were still closed. Projected 
opening dates run from June 16 to as late as June 23. 

   Here is a link to the USACE St. Louis District reporting lock closures and 
other flood information: https://www.mvs.usace.army.mil/Home/Flood-Fight/. 

   The St. Louis Harbor is closed until the river level recedes below 38 feet, 
which is not expected to occur until June 20, according to current forecasts. 
Mississippi River levels at St. Louis crested for the second time this year at 
45.7 feet on June 10, 3.9 feet lower than the record level of 49.6 feet set on 
Aug. 1, 1993. On Sunday, June 16, the river stage was at 42.7 feet. 

   Here is a link to the National Weather Service hydrograph for current and 
future river stage forecasts at St. Louis: 
https://water.weather.gov/ahps2/hydrograph.php?wfo=lsx&gage=eadm7. 

   The Lower Mississippi River remains open below St. Louis, but barge traffic 
continues to be disrupted by reduced tow sizes and transit time due to 
restrictions of daylight-only hours under some bridges between St. Louis and 
the Gulf. Barges are also subject to no-wake zones that also slow their transit 
time to the Gulf.

   "The system and everything within are stressed and upside down," said Tom 
Russell, Russell Marine Group. "Barge logistics are totally out of balance. 
Empty barge availability in New Orleans is limited and costly, and ships are 
backing up in New Orleans waiting for cargo deliveries. Roads and bridges in 
flooded areas limit rail and truck movements."  

   In the Southwest Pass (SWP), there is congestion due to safety protocols and 
high water. These protocols include daylight-only docking/undocking at 
midstream terminals when water levels are above 12 feet and extra tug power 
remains in barge fleets at all times, said Russell. "At 16 feet and above, all 
vessel movement will be daylight only from mile marker 233 through 90.5. 
Vessels anchoring in that area with a draft of 35 feet or greater will maintain 
a pilot on board while at anchor." Other safety protocols are also in place 
when New Orleans experiences heavy fog.

   "Midweek, there were 15 to 20 ships in queue waiting entry," said Russell. 
"There are five dredges working in the SWP to maintain draft. Due to heavy 
flows and strong current, shoaling and sandbars are a major issue." The 
Southwest Pass is one of the channels at the mouth of the Mississippi River 
that empties into the Gulf of Mexico at the southwestern most tip of the 
Mississippi River. 

   Shoaling and sandbars will be problematic throughout the entire river system 
where flooding has been ongoing. In the St. Paul district, dredging continues 
because of shoaling and is expected to continue most of the 2019 shipping 
season, according to the USACE St. Paul. This may add to slowdown in traffic 
once barges are able to move through the river system again. The USACE St. Paul 
District reported on June 14 that there are currently three active 
channel-dredging operations in the Mississippi River, and two contract 
mechanical-dredge crews are mobilizing to begin the week of June 17.

   BASIS, BARGE FREIGHT HIGHER; LOADED BARGES REMAIN STUCK ABOVE ST. LOUIS

   According to USDA's weekly Grain Transportation Report, flooding continues 
to reduce the amount of barged grain on the Mississippi River and its 
tributaries. "So far this year, 13,194 barges of grain have been unloaded at 
ports on the lower Mississippi River. This is 15% fewer than last year, and 13% 
below the three-year average. Year-to-date tonnages of down-bound grain, at 
locking portions of the Mississippi, Ohio and Arkansas Rivers, were 10 million 
tons, 29% lower than last year and 35% lower than the three-year average." 

   Corn and soybean deliveries to New Orleans are near six-year lows, according 
to USDA, as hundreds of barges full of corn and soybeans have been kept waiting 
up river until water recedes. American Commercial Barge Line reported in their 
daily newsletter on June 14 that they currently have 629 barges destined to 
areas affected by adverse river conditions.

   As of June 15, the Mississippi River at New Orleans was holding steady at 
16.6 feet, and current predictions show that it will not drop below 16 feet 
until late July. "The river stage in New Orleans is now in the longest 
sustained flood stage level on record," added Russell. That record could likely 
continue as weekend forecasts called for scattered showers in the Gulf area. 

   Here is a link to the National Weather Service hydrograph for current and 
future river stage forecasts at New Orleans: 
https://water.weather.gov/ahps2/hydrograph.php?wfo=lix&gage=norl1. 

   Cash basis for corn and soybeans on the Upper Mississippi River have 
strengthened for July and August delivery in anticipation of the river being 
nearly back to normal, allowing terminals to load out barges to move up and 
down river through St. Louis once again. Barge freight in that same area is 
high for the first two weeks of July and stays strong through the month, as 
there will be a big demand for empties. Basis has also been stronger in the 
Lower Mississippi River area as buyers need to get corn and soybeans to the 
Gulf for waiting ships.

   "Sooner or later, flood waters will recede," said Russell. "However, the 
consequences and repercussions will be felt for some time before returning to 
normal."

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly DDG Average Price Strengthens

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price 
from the 40 locations DTN contacted was $4 higher this week versus the prior 
week, at $137 per ton for the week ended June 13. DDG prices in the Eastern 
Corn Belt are more firm compared to other areas and, while Upper Midwest values 
are mixed, that may change once the Upper Mississippi River opens.

   While water is receding there, the river remains closed farther south where 
there are still seven locks closed. The biggest closure remains at St. Louis 
where water levels are at 43.7 feet as of midday June 14 and need to go below 
38 feet, which may not happen until June 19.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended June 13 was at 86.79% and is below the five-year 
average. The value of DDG relative to soybean meal was at 42.59%. The cost per 
unit of protein for DDG was $5.07, compared to the cost per unit of protein for 
soybean meal at $6.77. 

   Ethanol supply in the United States moved sharply lower during the first 
week of June, falling to 11-month lows according to the recent Energy 
Information Administration report. EIA reported ethanol plant production gained 
52,000 bpd or 5% to 1.096 million bpd, reversing up from a four-week low.

   In its weekly update, the U.S. Grains Council noted DDGS indications were 
higher again this week. "DDGS indications for FOB vessel Gulf are higher this 
week at $222/mt for July delivery. Indications for 40-foot containers to 
Southeast Asia decreased $3/mt, on average, Merchandisers report new sales to 
Indonesia and continued strong interest from buyers in Vietnam."


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT   PREVIOUS  CHANGE
COMPANY       STATE                     6/13/2019  6/6/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
              Missouri             Dry     $145      $142      $3
                                   Wet     $75        $74      $1
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
              Missouri Subject     Dry     $145      $135      $10
                                   Wet     $75        $65      $10
CHS, Minneapolis, MN (800-769-1066)
              Illinois             Dry     $150      $145      $5
              Indiana              Dry     $145      $140      $5
              Iowa                 Dry     $135      $130      $5
              Michigan             Dry     $145      $145      $0
              Minnesota            Dry     $135      $125      $10
              North Dakota         Dry     $135      $130      $5
              New York             Dry     $155      $155      $0
              South Dakota         Dry     $135      $115      $20
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
              Kansas               Dry     $135      $135      $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
              Indiana              Dry     $140      $140      $0
              Iowa                 Dry     $135      $135      $0
              Michigan             Dry     $130      $130      $0
              Minnesota            Dry     $135      $135      $0
              Missouri             Dry     $140      $140      $0
              Ohio                 Dry     $150      $150      $0
              South Dakota         Dry     $145      $145      $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas        Dry                  $120    $120       $0
              Wet                  $45     $45        $0
Illinois      Dry                  $140    $135       $5
Nebraska      Dry                  $120    $120       $0
              Wet                  $45     $45        $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
              Illinois             Dry     $140      $130      $10
              Indiana              Dry     $140      $135      $5
              Iowa                 Dry     $135      $130      $5
              Michigan             Dry     $135      $130      $5
              Minnesota            Dry     $130      $125      $5
              Nebraska             Dry     $130      $125      $5
              New York             Dry     $150      $145      $5
              North Dakota         Dry     $140      $140      $0
              Ohio                 Dry     $150      $145      $5
              South Dakota         Dry     $130      $125      $5
              Wisconsin            Dry     $130      $120      $10
Valero Energy Corp, San Antonio Texas   (210-345-3362)
Call          Indiana              Dry     $140      $140      $0
Call          Iowa                 Dry     $125      $125      $0
Call          Minnesota            Dry     $125      $125      $0
Call          Nebraska             Dry     $135      $135      $0
Call          Ohio                 Dry     $150      $150      $0
Call          South Dakota         Dry     $130      $130      $0
Call          California           Dry     $205      $205      $0
Western Milling, Goshen, California (559-302-1074)
California    Dry                  $215    $205       $10
*Prices listed per ton.
              Weekly Average               $137      $133      $4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

             VALUE OF DDG VS. CORN & SOYBEAN MEAL
               Settlement Price: Quote Date   Bushel Short Ton
                            Corn   6/13/2019 $4.4200   $157.86
                    Soybean Meal   6/13/2019 $321.70
   DDG Weekly Average Spot Price     $137.00
                      DDG Value Relative to:  6/13      6/6
                                        Corn  86.79%    88.56%
                                Soybean Meal  42.59%    42.10%
                   Cost Per Unit of Protein:
                                         DDG   $5.07     $4.93
                                Soybean Meal   $6.77     $6.65
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
HRW Wheat Begins New Crop Year

   Despite challenging growing conditions in many areas during the 2018 
harvest, the 2018 hard red winter (HRW) wheat crop had generally good kernel 
characteristics, according to the final U.S. Wheat Associates (USW) harvest 
report on Oct. 2, 2018. "Overall, 93% of composite, 91% of Gulf-Tributary and 
98% of Pacific Northwest (PNW)-Tributary samples graded U.S. No. 2 or better. 
Test weight averages were at 60.9 lb/bu, above the five-year average of 60.3 
lb/bu and above the prior year average of 60.5 lb/bu. The average wheat falling 
number was 373 seconds, which was comparable to the 2017 and five-year 
averages, and indicates sound wheat." (Falling number test is a determination 
of sprout damage in the wheat.)

   The USW report also noted the average protein in 2018 of 12.4% (12% moisture 
basis) was significantly higher than the prior year and equal to the five-year 
average. Protein content distribution varied by growing region; the 
Gulf-Tributary average was 12.7% and the PNW-Tributary average was 11.7%. 
Approximately 12% of the samples tested were less than 11.5% protein, 29% 
between 11.5% to 12.5% and 60% were greater than 12.5%.

   Here is a link to my 2018 HRW wheat harvest story on Aug. 20, 2018, that 
gives a good rundown of how the winter wheat growing areas around the U.S. 
fared: 
https://www.dtnpf.com/agriculture/web/ag/blogs/market-matters-blog/blog-post/201
8/08/20/2018-hard-red-winter-wheat-harvest .

   In USDA's September 28, 2018, Small Grains Summary report, USDA noted winter 
wheat yields in Kansas were at 38 bushel per acre (bpa), down from the 2017 
yield of 48 bpa. The yield in Oklahoma was at 28 bpa versus 34 bpa in 2017. 
Lower planted acres and drought conditions in Kansas, Oklahoma and many of the 
other key winter wheat states caused the lower yields in 2018.

   On Dec. 6, 2018, Kansas Wheat reported acres in Kansas would likely be lower 
than the prior year, possibly reaching new 100-year lows in the state. The 7.7 
million planted acres in fall 2017 were the third lowest in a century. 

   "Abnormal weather patterns in October and November contributed to the 
decrease in acres planted. According to the Kansas Mesonet, there was record 
precipitation throughout the state in October and below average temperatures in 
November," said Kansas Wheat. "The wet fall led to the state being essentially 
drought-free for the first time in years, but it also kept farmers out of the 
fields during fall harvest and wheat drilling time."

   In the Feb. 8, 2019, Winter Wheat Seedings report, USDA estimated that HRW 
wheat seeded area was expected to total 22.2 million acres, down 3% from 
seedings in 2018. Planted acreage was down versus the prior year across most of 
the growing region, with the largest declines in planted acreage estimated in 
California, Kansas and Oklahoma. Record low acreage was seeded in Nebraska, 
noted USDA.

   WHAT LIES AHEAD FOR HRW WHEAT FLAT PRICE?

   I asked Dan Maltby, a former HRW wheat buyer in Kansas City (KC) and 
currently a consultant for Risk Management Group in Minneapolis, for his price 
insight on last crop year and the year ahead. 

   "The past year was not a good one for U.S. HRW wheat producers unless they 
sold everything the first week of August 2018. Prices steadily eroded about 
$1.50 over the next 10 months," said Maltby. "This year, unfortunately, we 
might have already had the one marketing opportunity; although I don't yet 
think it's dead because there are three opportunities remaining that could 
help."

   Maltby said the first one involves corn planted acres and yield versus 
demand destruction. "This will take a while to play out and, unfortunately, may 
very well have done its thing IF corn acres were to yield 171 bpa," he said. 
Given the late planting, we are all well aware that this is anybody's guess at 
this point.

   "Second would be if spring wheat country stays dry; if so, expect the rally 
to be quick, and ultimately, probably fade," added Maltby. 

   Maltby said the third opportunity would be a Russian drought. "If that 
happens, then KC wheat will go much higher and stay up there much longer. The 
problem is that it is difficult to get reliable information from over there." 

   There is Australia, which is still dry and will probably stay dry, said 
Maltby. "But, Australian droughts don't seem to have the same rally power for 
KC wheat as Russia, Canada or this year, corn."

   Summing up his three opportunities, Malby said, "Both No. 2 and No. 3 are 
great until it rains, and then, no prisoners are taken on the way down."

   OLD-CROP BASIS STRENGTHENS OVER QUALITY CONCERNS IN NEW CROP

   Given the relentless rains and storms in the Southern Plains over the past 
month, it is likely the new-crop wheat will face some quality issues and lower 
protein than last year's crop. The KC spot market basis is already showing 
strength for milling quality old-crop HRW wheat, as mills are concerned about 
the potential for weather related problems in the new crop, especially in 
Oklahoma and Kansas.

   The DTN national average cash basis for the 2018-19 crop year ended above 
the maximum five-year average, much the same as the 2017-18 crop year. So far, 
early in the new-crop year of 2019-20, the DTN national average basis remains 
above the five-year average as well. This will likely remain the pattern given 
the potential quality issues.

   In their June 10, 2019, weekly harvest report, USW said rainstorms continue 
to hit the Great Plains and Midwest, significantly slowing harvest. "Harvest is 
22% complete in Texas and 1% in Oklahoma. In Kansas, there are increasing 
concerns about yield loss and impact from water; harvest is not expected to 
begin for another one to two weeks." 

   USW noted conditions have improved in Colorado and USDA estimates 80% of the 
crop there is in good-to-excellent condition. "HRW wheat conditions are also 
good in the Northern Plains and in Washington state. Harvest is still one or 
more weeks behind normal throughout the HRW wheat growing region as warmer 
weather is needed."

   The bottom line is that until all U.S. new-crop bushels are harvested, 
graded and in the bin, nobody can determine with 100% certainty what the 
new-crop quality is as it stands in the field. Given the current weather 
forecast, it could be a while before we get a good handle on new-crop quality 
because it may continue to deteriorate as it waits to be harvested. 

   According to the DTN forecast for the week ahead, DTN Senior Ag 
Meteorologist Mike Palmerino noted scattered light to moderate showers and 
thunderstorms with locally heavier in central Kansas. In northwest Kansas, 
northeast Colorado and southwest Nebraska, scattered to light showers are 
forecast. Dry conditions or just a few light showers are expected elsewhere. 

   "Near to above normal rainfall in the Southern Plains increases disease 
pressure on maturing wheat, lowers crop quality and disrupts the early 
harvest," added Palmerino.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
Bonus Target Contract: A Marketing Alternative Fit for the Current Environment

   As corn producers look to capitalize on the recent 90-cent rally in December 
corn futures from the mid-May contract low, one notable cash contract stands 
out. I know the contract as a "bonus target," which is a moniker I created 
while at DeBruce Grain in Kansas City. It may also be known as a "premium 
offer" contract. 

   In this contract, a farmer decides to capitalize on the recent rally by 
selling some of his anticipated production on new-crop corn. Suppose he is one 
of the lucky ones who planted corn in a timely fashion and feels comfortable 
forward selling some of the corn, even though there may be more upside in 
store. 

   Here is how the bonus target contract could work:

   As recently priced, the farmer sees December corn futures at $4.43 and the 
new-crop basis from the local cash grain elevator is 35 cents under December 
futures. Let's say the farmer has 5,000 bushels of new-crop corn to sell. The 
net cash price of $4.08 delivered to the elevator is enticing when compared to 
the mid-May price of $3.29. However, the producer would like to get a $4.25 
cash price for his new-crop. The local grain merchant suggests that there is a 
way to receive $4.25, but it entails the potential for a commitment to sell 
another, similar-quantity, of new-crop corn during harvest time. That contract 
is the bonus target. 

   Following the example, the farmer makes a commitment to sell 5,000 more 
bushels of new-crop corn at $5.00 for a net cash price of $4.65 a bushel. The 
local grain firm is willing to sell a $5.00 December call option for 19 cents 
and assumes the risk for any margin requirement. In this example, the firm 
takes 2 cents of the option premium and gives the farmer a "bonus" of 17 cents. 
That brings the net cash price of the farmer's first sale to $4.25 ($4.08 plus 
17 cents).

   What's the catch? In return for the 17-cent "bonus," the producer promises 
to sell and deliver another 5,000 bushels of new-crop corn if December corn is 
above the $5.00 option strike (or target) price on Nov. 22, the day the option 
expires. 

   The producer can establish both the target price and the expiration given 
several choices. In our example, the target is $5.00, and the expiration is 
Nov. 22, 2019. Even though options are involved, the farmer never has to worry 
about meeting margin calls -- that is the responsibility of the cash grain 
firm. The farmer never sells options or futures. 

   The net effect of this strategy is that the farmer receives a 17-cent per 
bushel bonus or premium above the local cash price and has the potential to 
sell another 5,000 bushels at a price that is 57 cents per bushel higher than 
December corn was at contract inception. 

   Before choosing this kind of contract, you will want to carefully examine 
the terms and conditions at your local grain firm. 

   Here are some disadvantages to consider:

   -- Until the option expires on Nov. 22, there is no guarantee the second 
sale will be made. 

   -- The futures price of corn can exceed the target prior to expiration and 
fall back below later, in which case a second sale is not guaranteed.

   -- Basis can change at any time and one may want to consider a separate 
contract to lock in basis.

   -- The futures price on the second sale will never be higher than the target 
chosen at inception.

   Also, it's important to keep in mind that no more than 20% to 25% of 
new-crop production should be committed to the bonus target in the event that 
futures go much higher.

   So, in conclusion, if you have seen a sharp rally in corn and would like to 
sell some corn -- either old-crop or new-crop; if you feel confident in your 
production, and if you would like to get a bonus above the current market price 
and have a chance to sell new-crop corn at a price level that is well above the 
current price, a bonus target contract could be for you. However, although you 
feel that prices could work higher, there is also bearish risk to consider. 
There is a lot of growing season ahead and increased export competition from 
South America. 

   The bonus target could be helpful to your marketing plan, if you understand 
the benefits and costs. Check with your local grain merchant to see if such a 
contract is available. 

   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 

******************************************************************************
Barge Traffic Stalled by Historic Flooding on Mississippi River System

   It has been a rough year for commerce on the Mississippi River system, and 
it continues to worsen as nonstop rains keep adding to already swollen rivers. 
Many areas are already cresting for a third time, meaning they have dropped 
below flood stage, only to rise again. Barge logistics on the Mississippi River 
have been slowed or entirely stopped due to weather-related flooding since 
January of this year, and it is still happening as we start June.

   Currently, flooding and high water have closed the Upper Mississippi from 
St. Louis to Minneapolis, the Illinois River, and Arkansas River to all barge 
traffic. As of May 31, American Commercial Barge Line reported that nearly all 
the locks in the Upper Mississippi River were closed.

   The Mississippi River in St. Paul, Minnesota has been in flood stage since 
March, with flood stage there at 14 feet and moderate flood stage at 15 feet. 
As the river moved south through the St. Paul District, after having been in 
flood stage since March, sand and sediment was washed through the channels 
creating shoaling, a sandy elevation of the bottom of the river, constituting a 
hazard to navigation. In response, the U.S. Army Corps of Engineers St. Paul 
has been busy dredging the channels to maintain the navigation channel and 
enable safe travels for tows pushing barges to the Port of St. Paul once water 
levels decrease and locks reopen further downstream.

   The St. Paul District is responsible for maintaining 243.6 miles of 
navigation channel to a depth of at least 9 feet on the Mississippi River from 
Minneapolis at river mile 857.6 to Guttenberg, Iowa, at river mile 614.0, and 
40.6 miles on three tributaries: the Minnesota, St. Croix and Black rivers. The 
district is also responsible for supporting inland navigation by operating 13 
locks and dams and by maintaining the 9-foot navigation channel.

   George Stringham, Public Affairs USACE St. Paul, told me dredging is 
currently taking place at five locations in the district. We talked about the 
continued flooding along the entire Mississippi River system and tributaries, 
and how it has stalled barges from coming up to St. Paul since the first tow of 
the season arrived with 12 barges on April 24.

   Stringham also mentioned that while the severe flooding in the summer of 
2014 caused them to dredge through most of the summer, the continued flooding 
in 2019 will likely keep them dredging in the St. Paul District through the 
rest of the navigation season.

   The Mississippi River in downtown St. Paul has now crested for a third time 
this year. It crested at 20.19 feet on March 31, the seventh highest crest on 
record. It hit a secondary crest of 17.64 feet on April 24, and on June 1, it 
crested at 15.84 feet. By May 8 of this year, the river had spent 42 
consecutive days above flood stage, surpassing the previous record of 33 days, 
set in 2001.

   Here is a link to the current stage of the Mississippi River in St. Paul: 
https://water.weather.gov/ahps2/hydrograph.php?wfo=mpx&gage=stpm5

   ST. LOUIS HARBOR CLOSED AGAIN

   On the afternoon of May 23, the U.S. Coast Guard once again shut down the 
Mississippi River at St. Louis when it rose above 38 feet, stopping barge 
traffic from moving into or out of the harbor for the second time this year.

   In 2019, the Mississippi River at St. Louis has been above flood stage for 
78 consecutive days as of June 2, with no end in sight. The record for flood 
duration was in 1993: For five total months, area rivers were at or above flood 
stage, including one stretch of 98 days in a row, according to National Weather 
Service data.

   On June 2, the Mississippi River at St. Louis was at 43.71 feet, on its way 
to the second crest of 46 feet. NWS in St. Louis said at 46 feet, this would be 
the second highest crest on record there.

   Here is a link to the current stage of the Mississippi River in St. Louis:

   https://water.weather.gov/ahps2/hydrograph.php?wfo=lsx&gage=eadm7

   "The Lower Mississippi (below St. Louis) is open to traffic, but is at flood 
stage from Cairo to New Orleans with safety protocols in effect. Water level in 
New Orleans is at 16.4 feet and holding, with strict flood stage protocol in 
place until levels drop below 16 feet," Tom Russell, of the Russell Marine 
Group, told me.

   Expectations are that the river will not drop below 16 feet until sometime 
later in the second half of June. "The river stage in Nola is now in the 
longest sustained flood stage level on record," added Russell. 

   Here is a link to the current stage of the Mississippi River in New Orleans:

   https://water.weather.gov/ahps2/hydrograph.php?wfo=lix&gage=norl1

   THE SPILLWAYS

   On May 10, the USACE New Orleans District reopened the Bonnet Carre Spillway 
for a second time, which was unprecedented during the same flood event. This is 
the first time this spillway has been opened in two consecutive years 
(2018/2019), and the first time it has been opened twice in the same year. As 
of May 31, there were 168 bays open.

   According to the USACE, a decision to operate the Bonnet Carre Spillway is 
made when existing conditions, combined with predicted river stages and 
discharges, indicate that the mainline levees in New Orleans and other 
downstream communities will be subjected to unacceptable stress from high 
water. Included in the complex decision process are environmental 
considerations, as well as hydrologic, structural, navigational and legal 
factors. The spillway is located in St. Charles Parish, Louisiana, about 12 
miles west of New Orleans.

   The second spillway operated by the USACE New Orleans District is the 
Morganza Floodway (Spillway) located in the Lower Mississippi River at river 
mile 280, near Morganza in Pointe Coupee Parish above Baton Rouge.

   The U.S. Army Corps of Engineers had intended to open the spillway on June 
2, but on May 30, changed the opening date to June 6. Army Corps spokesman 
Ricky Boyett said in a radio interview with WWL New Orleans that the decision 
was made due to a change in forecasts that show the Mississippi River won't 
reach an elevation that threatens overtopping the Morganza structure until at 
least June 9, compared to the prior model showing a June 5 threat.

   Unlike the Bonnet Carre Spillway, which is not a threat to homes and 
cropland, "the Morganza Spillway only opens in extreme situations due to the 
fact houses and crop land are flooded," said Russell. This would only be the 
third time the spillway has been opened since its completion in 1954.

   Should the USACE decide to open the spillway, a barge will be moved into 
place in Morgan City where the barge will be sunk to assist with flooding in 
Bayou Chene, according to local news reports.

   KALB-TV News in Alexandria, Louisiana, reported officials said that without 
a barge or a floodgate in place, Assumption, St. Mary, lower St. Martin, 
Iberville, and Terrebonne parishes would likely flood. 

   "Sinking the barge days before the spillway (opens) will help water levels 
go down in the Morgan City and backwater-flooded areas. The gradual opening of 
the gates will allow water in the Atchafalaya Basin (to) rise slow enough to 
nudge wildlife to higher ground without a sudden inundation," noted KALB.

   In March 2019, Louisiana Governor John Bel Edwards announced the state would 
begin construction on a permanent Bayou Chene floodgate to prevent having to 
sink additional barges, which serve as temporary floodgates.

   Here is a link to more information on the Morganza Spillway:

   
https://www.mvn.usace.army.mil/Missions/Mississippi-River-Flood-Control/Morganza
-Floodway-Overview/

   MORE RAIN AND START TO HURRICANE SEASON WILL EXASPERATE FLOODING

   It appears that the flooding in the U.S. will not be gone anytime soon. DTN 
Senior Ag Meteorologist Joel Burgio noted in his weather comments that a 
secondary weak southern branch trough is forming for the Central Plains, the 
South and east Midwest, and the Delta later in the six- to 10-day period. 

   "These troughs are likely to spread showers and thundershowers through the 
southern and eastern Midwest, and the Delta regions during the outlook period, 
maintaining the wet pattern for the Midwest and redeveloping the wet pattern 
over the Delta," said Burgio. "The first of these troughs is already east of 
the Central/Southern Plains region early in the outlook period. However, the 
second trough will bring showers and thunderstorms back to this area later in 
the period. The southeast U.S. ridge continues to show signs of weakening 
during the outlook period. This likely means less hot weather and greater 
chances for scattered thundershowers in the region during the six- to 10-day 
outlook period."

   As for hurricane season, Russell noted that it begins in early June and runs 
until October. "The most active period is late-July, August and early 
September, with the current forecast calling for 14 tropical storms, six 
Hurricanes and two to three intense hurricanes," said Russell. "There is danger 
for New Orleans should a hurricane impact while water levels on the Mississippi 
River are high. A surge of water from the Gulf could run up the river and 
possibly top the levees, causing city flooding."

   The flooding on the Mississippi River system has now entered record 
territory in more places than I mentioned above. The longest record now belongs 
to Baton Rouge, which on May 20 officially broke the 1927 record of being in 
flood stage for 135 days. On June 2, the river there was at 43.1 feet (flood 
stage is 35 feet), and it is expected to rise to a crest of 44.5 feet on June 
10. That means that, as of June 2, the Mississippi River at Baton Rouge has 
been in flood stage for 148 days. 

   Here is a link to the current stage of the Mississippi River in Baton Rouge:

   https://water.weather.gov/ahps2/hydrograph.php?gage=btrl1&wfo=lix

   The financial toll on everyone who is affected by this flooding on the 
entire Mississippi system cannot even be assessed yet, because there has been 
no end to it, and there is much uncertainty as to when it will end.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly DDG Average Price Sharply Higher

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price 
from the 40 locations DTN contacted was up $10 per ton on average this week 
versus the prior week, at $133 per ton for the week ended May 30. The DTN 
National Corn Index was 23 cents higher since the last price update, giving 
support to the DDG market.

   Ethanol supply in the U.S. reversed lower in the week ended May 24 following 
the first build in nearly a month, while plant production reversed down from 
the highest level of 2019, according to data released midmorning Thursday by 
the Energy Information Administration.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended May 30 was at 85.36% and is below the five-year 
average. The value of DDG relative to soybean meal was at 40.62%. The cost per 
unit of protein for DDG was $4.93, compared to the cost per unit of protein for 
soybean meal at $6.89. 

   In their weekly update, U.S. Grains Council noted that DDGS indications were 
mixed this week. "DDGS indications for FOB vessel Gulf are higher this week 
($215 per metric ton), driven by rising grain prices. Bids for product 
delivered to Asian markets are below offers as buyers wait to determine the 
longevity of the recent commodity rally. Exporters are defending offers as U.S. 
commodities are competitive on the world market. Otherwise, DDGS indications 
were up across the board. Indications for 40-foot containers to Southeast Asia 
are up $4/mt, on average, with Malaysia seeing the largest jump from last 
week's figure."

   It is still a mess on the U.S. river system with no barges moving in the 
Upper Mississippi River above St. Louis because the harbor there is still 
closed. There are 15 locks closed between Lock and Dam 12-27, including Mel 
Price Lock and the Louisiana Bridge at mile 282. The latest prediction is that 
those areas will likely remain closed through June 11 and the St. Louis Harbor 
could be closed at least until June 15.


ALL PRICES SUBJECT TO CONFIRMATION            CURRENT        PREVIOUS   CHANGE
COMPANY    STATE                             5/30/2019       5/23/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri                 Dry         $140           $130       $10
                                    Wet         $72             $68       $4
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
           Missouri Subject         Dry         $135           $135       $0
                                    Wet         $65             $63       $2
CHS, Minneapolis, MN (800-769-1066)
           Illinois                 Dry         $145           $130       $15
           Indiana                  Dry         $140           $130       $10
           Iowa                     Dry         $130           $115       $15
           Michigan                 Dry         $145           $135       $10
           Minnesota                Dry         $125           $110       $15
           North Dakota             Dry         $130           $120       $10
           New York                 Dry         $155           $145       $10
           South Dakota             Dry         $115           $100       $15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas                   Dry         $130           $120       $10
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana                  Dry         $140           $125       $15
           Iowa                     Dry         $135           $125       $10
           Michigan                 Dry         $130           $120       $10
           Minnesota                Dry         $135           $125       $10
           Missouri                 Dry         $140           $130       $10
           Ohio                     Dry         $145           $135       $10
           South Dakota             Dry         $145           $130       $15
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas                   Dry         $120           $120       $0
                                    Wet         $45             $45       $0
           Illinois                 Dry         $135           $135       $0
           Nebraska                 Dry         $120           $120       $0
                                    Wet         $45             $45       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois                 Dry         $130           $120       $10
           Indiana                  Dry         $135           $120       $15
           Iowa                     Dry         $130           $120       $10
           Michigan                 Dry         $130           $120       $10
           Minnesota                Dry         $125           $115       $10
           Nebraska                 Dry         $125           $118       $7
           New York                 Dry         $145           $140       $5
           North Dakota             Dry         $140           $130       $10
           Ohio                     Dry         $145           $130       $15
           South Dakota             Dry         $125           $115       $10
           Wisconsin                Dry         $120           $115       $5
Valero Energy Corp, San Antonio Texas    (210-345-3362)     (210-345-3362)
           Indiana                  Dry         $140           $125       $15
           Iowa                     Dry         $125           $115       $10
           Minnesota                Dry         $120           $110       $10
           Nebraska                 Dry         $135           $115       $20
           Ohio                     Dry         $150           $140       $10
           South Dakota             Dry         $130           $120       $10
           California               Dry         $205           $180       $25
Western Milling, Goshen, California (559-302-1074)
           California               Dry         $205           $193       $12
*Prices listed per ton.
           Weekly Average                       $133           $123       $10
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                                      5/30/2019      $4.3625   $155.80
Soybean Meal                              5/30/2019      $327.40
DDG Weekly Average Spot Price             $133.00
DDG Value Relative to:                                   5/30      5/23
Corn                                                     85.36%    88.36%
Soybean Meal                                             40.62%    41.39%
Cost Per Unit of Protein:
DDG                                                      $4.93     $4.56
Soybean Meal                                             $6.89     $6.26
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly DDG Average Price Higher

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price 
from the 40 locations DTN contacted was up $2 per ton on average this week 
versus the prior week, at $123 per ton for the week ended May 23. The DTN 
National Corn Index was 19 cents higher since the last price update, giving 
support to the DDG market.

   Feed traders are keeping a close eye on grain prices, as corn and soymeal 
prices have been moving higher on delayed planting concerns. If grain prices 
continue to rally, that could provide some spillover support for DDG and all 
feed ingredient markets.

   EIA Wednesday reported a third straight weekly increase in ethanol plant 
production, with output up 20,000 barrels per day (bpd) on the week to 1.071 
million bpd, the highest level of 2019. According to the data, the last time 
output breached 1.070 million bpd was the final week of August 2018.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended May 23 was at 88.36% and is below the five-year 
average. The value of DDG relative to soybean meal was at 41.39%. The cost per 
unit of protein for DDG was $4.56, compared to the cost per unit of protein for 
soybean meal at $6.26. 

   In their weekly update, U.S. Grains Council noted that DDGS indications were 
mixed this week. "Merchandisers report that international buyers are waiting 
for prices to settle after recent volatility, with close attention being paid 
to corn and soybean meal futures. Indications for 40-foot containers to 
Southeast Asia are unchanged from last week, on average, with Indonesia seeing 
a drop and Malaysia seeing an increase. Domestically, FOB vessel Gulf 
indications for the nearby are up this week to $201 per metric ton; U.S. rail 
rates are up as well."

   It will once again be hard to move containers to the Gulf after Coast Guard 
closed the Mississippi River at St. Louis on May 23 from mile marker 179 to 
mile marker 184 when the river rose above 38 feet. The river was at 39.26 on 
May 24 and is expected to crest at 42 feet, 2 feet above major flood stage, by 
May 28. There are eight locks closed on the UMR: 17, 20, 21, 22, 24, 25, Mel 
Price and 27. On top of that, the USACE St. Paul District said they have three 
dredging crews working to clear the sediment caused by flooding in some of the 
channels above Lock and Dam 11, with another two starting May 24, to enable 
tows to get to the Port of St. Paul once water levels decrease and locks reopen 
further downstream.


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT       PREVIOUS   CHANGE
COMPANY       STATE                           5/23/2019      5/16/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
              Missouri              Dry         $130           $130       $0
                                    Wet          $68            $68       $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
              Missouri Subject      Dry         $135           $130       $5
                                    Wet          $63            $60       $3
CHS, Minneapolis, MN (800-769-1066)
              Illinois              Dry         $130           $130       $0
              Indiana               Dry         $130           $130       $0
              Iowa                  Dry         $115           $115       $0
              Michigan              Dry         $135           $135       $0
              Minnesota             Dry         $110           $115       -$5
              North Dakota          Dry         $120           $120       $0
              New York              Dry         $145           $145       $0
              South Dakota          Dry         $100           $110      -$10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
              Kansas                Dry         $120           $120       $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
              Indiana               Dry         $125           $125       $0
              Iowa                  Dry         $125           $125       $0
              Michigan              Dry         $120           $120       $0
              Minnesota             Dry         $125           $125       $0
              Missouri              Dry         $130           $130       $0
              Ohio                  Dry         $135           $130       $5
              South Dakota          Dry         $135           $125       $10
United BioEnergy, Wichita, KS (316-616-3521)
              Kansas                Dry         $120           $115       $5
                                    Wet          $45            $45       $0
              Illinois              Dry         $135           $131       $4
              Nebraska              Dry         $120           $115       $5
                                    Wet          $45            $45       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
              Illinois              Dry         $120           $120       $0
              Indiana               Dry         $120           $120       $0
              Iowa                  Dry         $120           $115       $5
              Michigan              Dry         $120           $120       $0
              Minnesota             Dry         $115           $110       $5
              Nebraska              Dry         $118           $110       $8
              New York              Dry         $140           $140       $0
              North Dakota          Dry         $130           $120       $10
              Ohio                  Dry         $130           $130       $0
              South Dakota          Dry         $115           $110       $5
              Wisconsin             Dry         $115           $115       $0
Valero Energy Corp, San Antonio Texas     (210-345-3362)    (210-345-3362)
              Indiana               Dry         $125           $120       $5
              Iowa                  Dry         $115           $115       $0
              Minnesota             Dry         $110           $105       $5
              Nebraska              Dry         $115           $110       $5
              Ohio                  Dry         $140           $135       $5
              South Dakota          Dry         $120           $120       $0
              California            Dry         $180           $177       $3
Western Milling, Goshen, California (559-302-1074)
California    Dry                   $190        $190            $0
*Prices listed per ton.
              Weekly Average                    $123           $121       $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                                      5/23/2019      $3.8975   $139.20
Soybean Meal                              5/23/2019      $297.20
DDG Weekly Average Spot Price             $123.00
DDG Value Relative to:                                   5/23      5/16
Corn                                                     88.36%    89.39%
Soybean Meal                                             41.39%    40.08%
Cost Per Unit of Protein:
DDG                                                      $4.56     $4.48
Soybean Meal                                             $6.26     $6.36
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

******************************************************************************
Lower Mississippi River Still in Flood Stage; Barge Movements Remain Slow

   The good news for the week was the reopening of the St. Louis Harbor to 
barge traffic, but it could close again as flooding continues with more rain 
expected to add to the misery there all the way down to New Orleans.

   The St. Louis Harbor reopened to barge traffic on May 16, but the latest 
predictions are that it could rise again and reach 38 feet on May 25-26. If 
that happens, the harbor would close from mile 179-184 with long-term 
projections saying it could last until June 5-9, according to American 
Commercial Barge Line (ACBL). Relentless rains in the Midwest and Delta region 
are creating havoc on the already swollen Mississippi River. Mississippi River 
forecasts are based on rainfall that has occurred and that which is forecast to 
occur over the next 48 hours, according to the National Weather Service.

   On the Upper Mississippi River, all closed locks and two bridges have been 
reopened. But long-term projections are showing the Champ Clark Bridge at 
Louisiana, Missouri, possibly closing again on May 20 as a result of the 
upcoming rain event and remaining closed until June 8-13, according to ACBL. 
Locks 16, 17, and 20 are also predicted to close again around May 20, and are 
expected to remain closed until June 6-8 if more flooding occurs.

   Farther north in St. Paul, Minnesota, they are hoping for more barges to 
show up now that the locks are open. The first tow of the season, pushing 12 
barges, arrived on April 24. The lock closures south of the St. Paul District 
have prevented any other tows from reaching St. Paul. That has been evident in 
weekly barge rates published by USDA in that there are no freight rates quoted 
for this portion of the river as of May 14. There have also been incidents of 
shoaling in the St. Paul District as water levels receded. Shoaling is a result 
of the flooding depositing silt, creating sandy elevations in channels, which 
could cause grounding of vessels unless dredged.  

   On the Illinois River, heavy rains have created several no-wake restrictions 
that will be in place until May 22, slowing transits in those areas until it is 
lifted. Current projections have the Hardin, Illinois, area closing again on 
May 24-25, with concerns of the river overtopping the levees, according to 
ACBL. In addition, tows coming off the Illinois River in to St. Louis are 
restricted to 12 barges.

   In Cairo, Illinois, the Ohio River was at 46.7 feet on Sunday, May 19, 
slightly below the moderate flood stage of 47 feet. The Mississippi River at 
Cape Girardeau is in moderate flood stage at 41.2 feet and forecast to slowly 
fall before rising next weekend, according to the NWS. The level at Thebes, 
Illinois, is currently in moderate flood stage at 39.6 feet and forecast to 
slowly fall before slightly rising next weekend. 

   LOWER MISSISSIPPI RIVER STILL FLOODING

   The Mississippi River at Vicksburg, Mississippi, continues to be above flood 
stage, and on Sunday, May 19, the river was at 49.8 feet, very close to major 
flood stage of 50 feet. Tows are only allowed to pass through the Vicksburg 
Bridge (LMR Mile 435) during the daylight to avoid any accidents. 

   In Baton Rouge, the second opening of the Bonnet Carre Spillway became the 
first time the spillway was opened twice during the same flood event. After 
heavy rains in the Mississippi and Ohio River valleys increased river stages, 
the USACE opened the spillway on Feb. 27, 2019, in order to keep the volume of 
the Mississippi River flows at New Orleans from exceeding 1.25 million cubic 
feet per second (cfs). On April 11, the spillway was closed, but river stages 
remained high. Heavy rains across the valley prompted a second opening of the 
spillway May 10 and by May 16, the USACE New Orleans District reported that 
there were 138 bays open and holding.

   While many cities along the river have come close to or have broken water 
level records, perhaps the biggest record to be broken will be in Baton Rouge, 
Louisiana. In 1927, the river stayed above flood stage in Baton Rouge for 135 
days, and on May 21, it will surpass this mark and become the longest ever on 
record that Baton Rouge has been in flood stage. In fact, current predictions 
have the Mississippi River staying above flood stage of 35 feet into at least 
early June. As of May 19, the river there was at 43.83 feet and is expected to 
crest this week at 44 feet.

   In its weekly Grain Transportation Report, USDA noted that, as of May 11, 
calendar-year-to-date grain barge tonnages through the locking portions of the 
Mississippi, Ohio and Arkansas rivers, were 8.8 million tons. This is 32% below 
the three-year average and 24% lower than last year. 

   "For most of 2019, above-average rainfall has caused high water conditions 
that have disrupted traffic. Typically, by mid-May, there is continuous barge 
traffic (both up and down river) on the Mississippi River between 
Minneapolis/St. Paul, Minnesota, and the Gulf of Mexico. This year, navigation 
has been blocked by the closure of several locks above St. Louis and by low 
bridge clearances in certain areas due to high water," said USDA.

   Now, imagine what this has meant for farmers who rely on the rivers to move 
their soybeans and corn to market. They are already feeling the negative 
financial effects of the long trade war between China and the U.S. The dispute 
has created a loss of U.S. exports to China, causing farmers to have to store 
more of their grain, especially soybeans, longer than they normally do. This 
means that marketing opportunities have been lost and some of the stored 
soybeans have gone out of condition, downgrading the quality.

   As the flooding continues to hamper or slow river terminals from loading 
barges to head down to the Gulf for export, some farmers are unable to haul 
grain to their river elevators. It has also stopped barges from moving to the 
north -- barges that would normally be bringing fertilizer to farmers for 
spring planting. Many farmers have said that not only is this causing a rise in 
fertilizer prices, but many suppliers who can't get more product are rationing 
supplies.

   It's been a rough year so far for all ag-related businesses, and it isn't 
over yet, according to the current river forecasts.

   Here is a link to the NWS north-central river forecast: 
https://www.weather.gov/ncrfc/ 

   Here is a link to the NWS Lower Mississippi River forecast: 
https://www.weather.gov/lmrfc/ 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DTN Weekly DDG Average Price Steady

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price 
from the 40 locations DTN contacted was steady on average this week versus the 
prior week, at $121 per ton for the week ended May 16. Prices were mixed and 
the strength in the corn market at the end of the week was supportive.

   DDG prices may find pressure if the corn market reverses lower as ethanol 
plant production continues to rise while demand slows. However, with delays in 
corn planting continuing as heavy rain falls on already soaked fields in 
Midwest over the next seven days, it is unlikely corn prices will fade. 

   The EIA said Wednesday that during the week ended May 10, ethanol plant 
production ramped up 15,000 barrels per day (bpd), or 1.4%, to 1.0151 million 
bpd, the fourth highest weekly output rate in 2019, while 7,000 bpd less than a 
year ago.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended May 16 was at 89.39% and is below the five-year 
average. The value of DDG relative to soybean meal was at 40.08%. The cost per 
unit of protein for DDG was $4.48, compared to the cost per unit of protein for 
soybean meal at $6.36. 

   The flooding along the Mississippi River has been plaguing sellers who ship 
DDGS for export on the river down to the Gulf. The St. Louis Harbor opened on 
May 16, along with most of the locks above there that had been closed because 
of flooding. The USACE in St. Paul has noted shoaling is creating problems 
above mile 615, closing parts of the river to be dredged. The Lower Mississippi 
River in to the Gulf is still in flood stage, and expectations are this will 
continue in to June, as more rain this weekend will add to the high water.


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS  CHANGE
COMPANY       STATE                           5/16/2019       5/9/2019
Bartlett and Company, Kansas City, MO (816-753-6300)
              Missouri              Dry          $130           $130      $0
                                    Wet          $68            $70       -$2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
              Missouri Subject      Dry          $130           $130      $0
                                    Wet          $60            $60       $0
CHS, Minneapolis, MN (800-769-1066)
              Illinois              Dry          $130           $125      $5
              Indiana               Dry          $130           $125      $5
              Iowa                  Dry          $115           $110      $5
              Michigan              Dry          $135           $130      $5
              Minnesota             Dry          $115           $110      $5
              North Dakota          Dry          $120           $115      $5
              New York              Dry          $145           $140      $5
              South Dakota          Dry          $110           $105      $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
              Kansas                Dry          $120           $115      $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
              Indiana               Dry          $125           $130      -$5
              Iowa                  Dry          $125           $120      $5
              Michigan              Dry          $120           $125      -$5
              Minnesota             Dry          $125           $125      $0
              Missouri              Dry          $130           $125      $5
              Ohio                  Dry          $130           $130      $0
              South Dakota          Dry          $125           $125      $0
United BioEnergy, Wichita, KS (316-616-3521)
              Kansas                Dry          $115           $125     -$10
                                    Wet          $45            $55      -$10
              Illinois              Dry          $131           $135      -$4
              Nebraska              Dry          $115           $125     -$10
                                    Wet          $45            $55      -$10
U.S. Commodities, Minneapolis, MN (888-293-1640)
              Illinois              Dry          $120           $120      $0
              Indiana               Dry          $120           $120      $0
              Iowa                  Dry          $115           $115      $0
              Michigan              Dry          $120           $120      $0
              Minnesota             Dry          $110           $110      $0
              Nebraska              Dry          $110           $110      $0
              New York              Dry          $140           $140      $0
              North Dakota          Dry          $120           $120      $0
              Ohio                  Dry          $130           $130      $0
              South Dakota          Dry          $110           $110      $0
              Wisconsin             Dry          $115           $115      $0
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
              Indiana               Dry          $120           $125      -$5
              Iowa                  Dry          $115           $120      -$5
              Minnesota             Dry          $105           $110      -$5
              Nebraska              Dry          $110           $110      $0
              Ohio                  Dry          $135           $135      $0
              South Dakota          Dry          $120           $125      -$5
              California            Dry          $177           $175      $2
Western Milling, Goshen, California (559-302-1074)
California    Dry                   $190         $190            $0
*Prices listed per ton.
              Weekly Average                     $121           $121      $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                                      5/16/2019      $3.7900   $135.36
Soybean Meal                              5/16/2019      $301.90
DDG Weekly Average Spot Price             $121.00
DDG Value Relative to:                                   5/16      5/9
Corn                                                     89.39%    98.34%
Soybean Meal                                             40.08%    42.41%
Cost Per Unit of Protein:
DDG                                                      $4.48     $4.48
Soybean Meal                                             $6.36     $6.01
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

******************************************************************************
US Surface Transportation Board Getting Back on Track

    Since Oct. 1, 2017, the U.S. Surface Transportation Board (STB) has been 
looking lean, with only two commissioners on hand. When President Donald Trump 
took office, he nominated Commissioner Ann D. Begeman, a Republican, to become 
acting chairman, with former chairman, Democrat Dan Elliot, becoming vice 
chairman. At that time, the STB consisted of three commissioners: Begeman and 
Elliot, along with Democrat Ann Miller. 

   On Sept. 30, 2017 after former STB chairman and then STB member Dan Elliott 
resigned, only two members remained. While there is no quorum requirement for 
voting at the STB, meaning Begeman and Miller could continue to decide cases, a 
voting tie would be considered a negative result. However, at the NGFA 
Transportation conference in July 2018, Begeman told participants that 
rulemaking issues were on hold until the new members are confirmed, because 
they "need to be decided by all five members, not just two." The 2015 Surface 
Transportation Board Reauthorization Act created two new seats to make the STB 
a five-person agency, but since that time there have been no White House 
nominations under Obama or Trump to fill the extra two vacancies.

   In March 2018, President Trump did nominate two Republicans to be on the 
Board: Patrick Fuchs, a senior staff member of the Senate Commerce Committee 
and Michelle Schultz, associate general counsel for the Southeastern 
Pennsylvania Transportation Authority (SEPTA). On July 6, 2018, President Trump 
nominated Martin J. Oberman, a Democrat and attorney from Chicago. All were 
awaiting review and confirmation by the Senate.

   On Jan. 1, 2019, the day after former Commissioner Deb Miller's term 
expired, Begeman became the only commissioner on the STB. Then, on Jan. 3, the 
Senate confirmed two new STB commissioners, Fuchs and Oberman, but the Senate 
did not advance the nomination of Schultz, thus leaving the STB with only three 
commissioners. 

   NEW BOARD GETS TO WORK ON UNFINISHED BUSINESS

   There have been many issues left hanging for years as the STB went through 
changes. One of them, the rail rate case process, has been under discussion 
since late 2013. Begeman spoke at the July 25, 2018, National Grain and Feed 
(NGFA) Ag Transportation Summit in Washington, D.C, and said that most shippers 
are painfully aware that the current methodology used to challenge freight rail 
rates is unreasonable, time consuming and extremely costly for a shipper to 
file. 

   In Jan. 2018, Chairman Ann Begeman formed a rail rate reform task force to 
recommend improvements to the STB's existing rate review processes and to 
propose new rate-review methodologies that are more attuned to the realities of 
the current transportation world. Sixteen months later, on April 29, 2019, the 
task force completed a staff report providing its recommendations for possible 
changes to the rate review methodologies and processes used by the STB. 

   The STB simultaneously made the report available to the public: 
https://www.stb.gov/__85256593004F576F.nsf/0/A35993C296D44A93852583EB0050D594?Op
enDocument

   The National Grain and Feed Association (NGFA) issued a press release 
commending the STB for issuing the completed staff report of its rail rate 
reform task force. "Based upon an initial review, the NGFA believes the task 
force has produced a thoughtful, succinct and good-faith document that contains 
an accurate portrayal of the systemic problems with each of the STB's existing 
methodologies and procedures available to rail customers to exercise their 
legal right to challenge unreasonable rail rates." 

   The NGFA said it is "evident from the report that the task force listened 
and earnestly evaluated comments and input made by the NGFA and other rail 
stakeholders during its year-long process of reaching out to rail customers and 
carriers alike." 

   The NGFA also commended Chairman Begeman, who in an April 29 statement 
accompanying the release of the task force report, cited rail rate reform as 
her "top priority" and further stated that the "only option not on the table is 
one where we (the STB) do nothing," something that the NGFA wholeheartedly 
agreed with.

   The NGFA also commended the task force for recognizing the statutory 
constraints imposed by Congress on railroads' ability to "differentially price" 
their traffic by charging higher rates to some customers of similar traffic 
compared to others, once the carriers attain revenue adequacy.

   The NGFA in 2011 had developed and proposed to the STB a new, simplified 
rate-challenge methodology intended to be workable for agricultural shippers 
and receivers. NGFA said it looks forward to participating fully in future STB 
forums that are expected to be organized to solicit feedback on its task force 
report and ways to refine, build upon and pursue its recommendations. NGFA said 
it would provide additional reaction, input and recommendations concerning the 
task force report at that time.

   Another issue, reciprocal switching, has been brewing since July 2016 and is 
perhaps the most contentious among the industry. Reciprocal switching refers to 
situations in which a Class I railroad that has physical access to a specific 
shipper's facility switches traffic from the facility to another railroad that 
does not have physical access, in exchange for compensation in the form of an 
access fee/switch charge. "This is a complicated issue," Begeman said at the 
2018 NGFA Transportation Summit. "We need to make sure we know what we're doing 
so there are no unintended consequences."

   Begeman added, "I want good rail service to where a shipper wants to go for 
the price they are willing to pay and don't have to worry about reciprocal 
switching costs."

   "Shippers can contact my office at any time through the STB Rail Customer 
and Public Assistance Program," said Begeman. "This program solves problems in 
ways ranging from a simple answer to a telephone inquiry to lengthy informal 
mediation efforts." Topics include questions on rates and other charges, 
railroad-car supply and service issues, claims for damage, interchange issues, 
employee complaints and community concerns. Begeman said that this program has 
been "successful for shippers." 

   Here is a link to more information on the STB Rail Customer and Public 
Assistance Program: https://www.stb.gov/stb/rail/consumer_asst.html

   "We can't fix everything," Begeman said, "but we sure will try."

   Here is a link to the STB website where you will find links to all of the 
current issues the STB is working on: https://www.stb.gov/stb/index.html

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

   Follow her on Twitter @MaryCKenn

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

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