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Market Matters Blog           06/22 10:53
DDG Prices Continue to Push Lower
New Bipartisan Bill Delays ELD Enforcement, Says Reforms Needed
DDG Prices Continue Downward Slide
New Crop, New Year for Winter Wheat 
DDG Prices Sharply Lower
Time Running Out for Agriculture ELD Exemption
DDG Prices Lower
DDG Prices Steady 
Export Outlook for U.S. DDGS Challenging, but Promising
High Water Temporarily Closes Two Mississippi River Locks

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

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

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

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

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


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

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      6/21/2018   $3.5700      $127.50
                             Soybean Meal      6/21/2018   $331.80
            DDG Weekly Average Spot Price        $133.00
                                  DDG Value Relative to:   6/21        6/14
                                                    Corn   104.31%      114.93%
                                            Soybean Meal    40.08%       43.41%
                               Cost Per Unit of Protein:
                                                     DDG     $4.93        $5.52
                                            Soybean Meal     $6.99        $7.23
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

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

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

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

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

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

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

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

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

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

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

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

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

   SAFETY ADVOCATES OPPOSE BILLS TO CHANGE/EXEMPT REGULATIONS

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

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

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

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

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

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

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

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

   Follow her on Twitter @MaryCKenn

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

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

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

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

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


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

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn      6/14/2018   $3.6300      $129.64
                             Soybean Meal      6/14/2018   $343.20
            DDG Weekly Average Spot Price        $149.00
                                  DDG Value Relative to:   6/14        6/7
                                                    Corn   114.93%      119.07%
                                            Soybean Meal    43.41%       44.64%
                               Cost Per Unit of Protein:
                                                     DDG     $5.52        $5.93
                                            Soybean Meal     $7.23        $7.55
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

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

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

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

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

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

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

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

   What Lies Ahead for HRW Wheat Prices?

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

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

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

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

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

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

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

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

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

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

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

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

   Follow her on Twitter @MaryCKenn

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

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

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

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

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

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


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

   **


                     VALUE OF DDG VS. CORN & SOYBEAN MEAL
                        Settlement Price:   Quote Date      Bushel  Short Ton
                                     Corn       6/7/2018   $3.7625      $134.38
                             Soybean Meal       6/7/2018   $358.40
            DDG Weekly Average Spot Price        $160.00
                                  DDG Value Relative to:    6/7        5/31
                                                    Corn   119.07%      121.52%
                                            Soybean Meal    44.64%       45.56%
                               Cost Per Unit of Protein:
                                                     DDG     $5.93        $6.33
                                            Soybean Meal     $7.55        $7.90
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
Time Running Out for Agriculture ELD Exemption

   While the U.S. Department of Transportation's Federal Motor Carrier Safety 
Administration's (FMCSA) 90-day electronic logging device (ELD) waiver for 
agriculture truckers expires June 18, one group has already been granted an 
extension until fall. When President Donald Trump signed the $1.3 trillion 
spending bill in March 2018, it also passed an extension on the ELD 
implementation for livestock haulers. The bill, passed on March 23, included a 
mandate for livestock and insect haulers to have an exemption through September 
30, 2018. 

   However, drivers hauling non-livestock ag commodities, such as produce, feed 
and fertilizer, must begin using an ELD by June 19, the date that enforcers 
will begin issuing citations and out-of-service orders for non-compliance, 
according to the FMCSA. Drivers who haul agricultural commodities within a 
"150-air mile radius of the farmer's farm or ranch," are exempt from hours of 
service regulations, meaning they will not have to adopt an ELD before the June 
19 enforcement date. Only drivers required to keep records of driving status 
will need to comply with the ELD mandate. 

   For Agricultural Exceptions and Exemptions updated through May 31, 2018, go 
here: 
https://www.fmcsa.dot.gov/hours-service/elds/agricultural-exceptions-and-exempti
ons-federal-motor-carrier-safety

   On May 22, 2018, Senators Ben Sasse (R-NE), Heidi Heitkamp (D-ND), Jerry 
Moran (R-KS), Joni Ernst (R-IA), Jon Tester (D), John Hoeven (R-ND), Tina Smith 
(D-MN), Pat Roberts (R-Ks), Rand Paul (R-KY), Marco Rubio (R-FL), and Doug 
Jones (D-AL) introduced the Transporting Livestock Across America Safely Act 
(TLAAS). This bill seeks to ease the burden of "far-reaching" Hours-of-Service 
(HOS) and Electronic Logging Devices (ELD) regulations for haulers of livestock 
and insects. 

   United States Cattlemen's Association (USCA) Transportation Committee 
Chairman Steve Hilker issued the following statement about the bill: "We asked, 
and Congress answered. This is a historic moment for livestock and insect 
haulers to finally be afforded needed flexibility in the restrictive 
Hours-of-Service (HOS) rules. We commend this bipartisan group of Senators, led 
by Sen. Sasse, for working with the industry towards a common-sense solution."

   USCA provided the following "fast facts" of the Transporting Livestock 
Across America Safely Act: 

   -- Providing that HOS and ELD requirements are inapplicable until after a 
driver travels more than 300-air miles from their source. Drive time for HOS 
purposes does not start until after the 300-air mile threshold. 

   -- Exempts loading and unloading times from the HOS calculation of driving 
time.

   -- Extends the HOS on-duty time maximum hour requirement from 11 hours to a 
minimum of 15 hours and a maximum of 18 hours of on-duty time.

   -- Grants flexibility for drivers to rest at any point during their trip 
without counting against HOS time.

   -- Allows drivers to complete their trip -- regardless of HOS requirements 
-- if they come within 150-air miles of their delivery point. 

   -- After the driver completes his delivery and the truck is unloaded, the 
driver will take a break for a period that is five hours less than the maximum 
on-duty time (10 hours if a 15-hour drive time). 

   It is important to note that the ELD and HOS actually intertwine, and thus 
are mentioned together when the ELD exemption is requested. Basically the ELD 
mandate requires all commercial drivers who prepare HOS records to connect an 
ELD to a vehicle's engine to record driving hours. Once the time expires, the 
ELD doesn't shut the truck down, but it alerts the driver that they are 
violating the rule if they continue to drive. Hilker pointed out on the USCA 
website that under the current HOS rules, livestock haulers are allocated 11 
hours of drive time and 14 hours of on-duty time. 

   "Once they've hit their hours, the ELD will force drivers off the road to 
take their mandatory 10-hour break. This leaves cattle potentially stranded 
roadside on the truck. The list of poor outcomes begins to grow exponentially, 
almost immediately," said Hilker. "Not to mention, the financial hit the driver 
will take as precious time ticks away will push small and mid-sized trucking 
companies immediately out of business. It will also put more pressure on an 
already very thinly populated driver pool."

   Opponents of the bill, like the American Trucking Associations (ATA), 
cautions that the "lives of livestock should not be a priority over the lives 
of people." 

   Bill Sullivan, leader of advocacy for ATA, advised against the legislation. 
On May 31, he told Transport Topics, the nation's logistics and trucking news 
leader, that such a law would be dangerous for truck drivers and all motorists. 
"This bill would allow truck drivers to stay behind the wheel for almost twice 
as long as they're permitted under the current hours-of-service rules," 
Sullivan said. "It needlessly and recklessly jeopardizes the safety of people 
who travel our highways. We should not prioritize livestock over people's 
lives, and ATA urges Congress to reject this misguided legislation."

   As for small businesses, legislation was recently introduced to exempt them 
and all agriculture sectors. In a press release on May 23, 2018, Montana 
Congressman Greg Gianforte said that he and Representative Collin Peterson 
(D-Minn.) have introduced two pieces of bipartisan legislation to relieve 
certain sectors of the trucking industry from the Federal Motor Carrier 
Association's ELD mandate.

   The Small Carrier Electronic Logging Device Exemption Act of 2018 will 
completely exempt businesses that operate 10 or fewer trucks from the 
requirements of the ELD mandate. The Agricultural Business Electronic Logging 
Device Exemption Act of 2018 will completely exempt agricultural businesses.

   "This legislation will eliminate costly and time-consuming regulations for 
small trucking companies and individual owner-operators, which constitute much 
of the rural trucking industry." Peterson said. "In addition, it will help 
reduce unnecessary stops and delays which threaten the quality of agricultural 
products on their way to market."

   Both the Owner Operator Independent Drivers Association (OOIDA) and the 
Small Business Transportation Coalition have endorsed the Small Carrier 
Electronic Logging Device Exemption Act of 2018. However, the Trucking Alliance 
has opposed the latest proposed legislation, saying that the bill is unlikely 
to become law and sends a false message about the purpose of ELDs.

   There are many groups fighting for the use of ELD and many others fighting 
against it. Since its "official" implementation on Dec. 18, 2017, there have 
been exemptions granted and even a delay in "hard enforcement" of the mandate 
to April 1, 2018. 

   It appears the fight is not over, but in the meantime, unless something 
changes for Ag haulers, their exemption will soon run out. 

   The most recent FMCSA guidance changes on the "150-air-mile-radius" Ag hours 
of service exemption, and personal conveyance related to finding a parking 
spot, can be found at the following links:

   
http://www.dtn.com/ag/assets/agricultural-commodity-transportation-guidance.pdf

   http://www.dtn.com/ag/assets/cmv-personal-conveyance-regulatory-guidance.pdf

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

   Follow her on Twitter @MaryCKenn

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

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations DTN contacted was $171 per ton for the week-ended May 31, $1 
weaker versus one week ago.

   Merchandisers noted that DDG trading has been quiet since the Memorial Day 
holiday weekend, and many have already sold product through June. CIF New 
Orleans, Louisiana, (NOLA) DDGS values have been flat to weaker, and overall, 
prices have been under pressure from lower soymeal and corn markets. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended May 31 was at 121.52%, and the value of DDG relative 
to soybean meal was at 45.56%. The cost per unit of protein for DDG was $6.33, 
compared to the cost per unit of protein for soybean meal at $7.90. On a 
protein basis, DDG prices are still a good value compared to other byproducts.

   Spot offers have become aggressive due to slow railcar logistics that are 
causing some plants to run short on storage room, noted the U.S. Grains Council 
(USGC). In their weekly price update, USGC reported that, "Barge CIF NOLA DDGS 
prices are $10/metric ton (mt) lower for June shipments because of the 
logistics constraints. On the export markets, FOB NOLA prices fell $1/mt while 
CNF Southeast Asia prices were mostly steady. June shipments to Asia (CNF 
prices) rose $1/mt while July/August shipment values were steady."


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                               5/31/2018       5/24/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $175           $180       -$5
                              Modified           $88             $90       -$2
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $180           $184       -$4
          Indiana             Dry                $174           $175       -$1
          Iowa                Dry                $170           $170       $0
          Michigan            Dry                $175           $175       $0
          Minnesota           Dry                $170           $170       $0
          North Dakota        Dry                $170           $170       $0
          New York            Dry                $175           $175       $0
          South Dakota        Dry                $165           $165       $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $160           $160       $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $180           $180       $0
          Iowa                Dry                $170           $170       $0
          Michigan            Dry                $180           $180       $0
          Minnesota           Dry                $170           $170       $0
          Missouri            Dry                $185           $185       $0
          Ohio                Dry                $180           $180       $0
          South Dakota        Dry                $170           $170       $0
    `              `
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $162           $162       $0
                              Wet                $50             $50       $0
          Illinois            Dry                $181           $181       $0
          Nebraska            Dry                $162           $162       $0
                              Wet                $50             $50       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $175           $175       $0
          Indiana             Dry                $175           $175       $0
          Iowa                Dry                $160           $170      -$10
          Michigan            Dry                $170           $170       $0
          Minnesota           Dry                $165           $170       -$5
          Nebraska            Dry                $150           $155       -$5
          New York            Dry                $180           $180       $0
          North Dakota        Dry                $165           $170       -$5
          Ohio                Dry                $170           $170       $0
          South Dakota        Dry                $160           $165       -$5
          Wisconsin           Dry                $170           $170       $0
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $180           $180       $0
          Iowa                Dry                $170           $170       $0
          Minnesota           Dry                $170           $170       $0
          Nebraska            Dry                $170           $170       $0
          Ohio                Dry                $180           $180       $0
          South Dakota        Dry                $165           $165       $0
          California                             $234           $234       $0
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $238           $243       -$5
*Prices listed per ton.
          Weekly Average                         $171           $172       $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      5/31/2018   $3.9400      $140.71
                             Soybean Meal      5/31/2018                $375.30
            DDG Weekly Average Spot Price                               $171.00
                                  DDG Value Relative to:   5/31        5/24
                                                    Corn   121.52%      119.13%
                                            Soybean Meal    45.56%       45.59%
                               Cost Per Unit of Protein:
                                                     DDG     $6.33        $6.37
                                            Soybean Meal     $7.90        $7.94
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

******************************************************************************
DDG Prices Steady 

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations DTN contacted was $172 per ton for the week-ended May 24, 
unchanged versus two weeks ago.

   Merchandisers noted that, overall, DDGS export prices were supported by good 
demand and increased buyer interest. On the domestic front, DDG prices were 
mixed with some lowering prices in spots, partially in sympathy with lower 
soybean meal prices. 

   There seems to be no supply issues at this point, according to 
merchandisers, and the Memorial Day long weekend will likely not make a 
difference. DDG prices seasonally flatten out once weather warms, along with 
pastures greening up which means feeders can lighten feed by-product usage in 
rations. USDA NASS noted Monday that pasture and range conditions in the 48 
states average 5% very poor, 14% poor, 35% fair, 39% good and 7% very good; a 
slight increase in conditions from one week ago.

   Kansas is only 23% good, 2% excellent and North Dakota conditions are only 
at 24% good, 2% excellent due to drought. These two states are showing the 
worst conditions at this time with Texas not far off at 25% good, and 5% 
excellent. If drought persists, that could spell trouble for livestock owners 
in those states.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended May 24 was at 119.13%, and the value of DDG relative 
to soybean meal was at 45.39%. The cost per unit of protein for DDG was $6.37, 
compared to the cost per unit of protein for soybean meal at $7.94.

   The U.S. Grains Council (USGC) noted in its weekly market price update, "On 
the export side, barge CIF NOLA DDGS values are higher while FOB NOLA values 
gained as well. Netbacks to merchandisers with river access have been higher 
than average in recent weeks, and the latest prices appear to be a reversion 
back to 'normal.' Prices for DDGS CIF Southeast Asia increased $5/metric ton as 
buyers expand their interest in covering forward needs. Prices for product 
destined for Indonesia gained $8/mt, while product for Japan and Taiwan 
increased $7/mt. Notably, there were not Asian destinations quoted where prices 
were lower than last week."


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                               5/24/2018       5/10/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $180           $180       $0
                              Modified           $90             $90       $0
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $180           $180       $0
          Indiana             Dry                $175           $175       $0
          Iowa                Dry                $175           $175       $0
          Michigan            Dry                $175           $175       $0
          Minnesota           Dry                $170           $170       $0
          North Dakota        Dry                $170           $170       $0
          New York            Dry                $175           $175       $0
          South Dakota        Dry                $170           $170       $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $160           $165       -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $180           $175       $5
          Iowa                Dry                $170           $165       $5
          Michigan            Dry                $180           $180       $0
          Minnesota           Dry                $170           $170       $0
          Missouri            Dry                $185           $185       $0
          Ohio                Dry                $180           $175       $5
          South Dakota        Dry                $170           $165       $5
    `              `
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $162           $168       -$6
                              Wet                $50             $55       -$5
          Illinois            Dry                $181           $178       $3
          Nebraska            Dry                $162           $168       -$6
                              Wet                $50             $55       -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $175           $175       $0
          Indiana             Dry                $175           $175       $0
          Iowa                Dry                $170           $165       $5
          Michigan            Dry                $170           $170       $0
          Minnesota           Dry                $170           $170       $0
          Nebraska            Dry                $155           $165      -$10
          New York            Dry                $180           $180       $0
          North Dakota        Dry                $170           $170       $0
          Ohio                Dry                $170           $170       $0
          South Dakota        Dry                $165           $165       $0
          Wisconsin           Dry                $170           $170       $0
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $180           $178       $2
          Iowa                Dry                $170           $170       $0
          Minnesota           Dry                $170           $175       -$5
          Nebraska            Dry                $170           $170       $0
          Ohio                Dry                $180           $180       $0
          South Dakota        Dry                $165           $165       $0
          California                             $234           $238       -$4
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $243           $245       -$2
*Prices listed per ton.
          Weekly Average                         $172           $172       $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      5/24/2018   $4.0425      $144.38
                             Soybean Meal      5/24/2018   $377.30
            DDG Weekly Average Spot Price        $172.00
                                  DDG Value Relative to:   5/24        5/10
                                                    Corn   119.13%      121.01%
                                            Soybean Meal    45.59%       44.05%
                               Cost Per Unit of Protein:
                                                     DDG     $6.37        $6.37
                                            Soybean Meal     $7.94        $8.22
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.


******************************************************************************
Export Outlook for U.S. DDGS Challenging, but Promising

   Alvaro Cordero, manager of global trade for the U.S. Grains Council (USGC), 
told attendees at the 22nd Annual Distillers Symposium on May 16 that one of 
the biggest challenges facing distillers dried grain with solubles (DDGS) has 
been China. Go back to January 2017 when China's Ministry of Commerce (in a 
final ruling following a year-long trade probe) slapped harsh anti-dumping 
duties and tariffs on U.S. DDGS imports. Anti-dumping duties were set at a 
range from 42.2% to 53.7%, while anti-subsidy tariffs will be between 11.2% and 
12%.

   Preliminary penalties assessed in late September 2016 of an anti-dumping 
penalty of 33.8% and an anti-subsidy tariff of 10% to 10.7% had already shut 
off most DDGS exports to China. However, the final ruling of an increase to 
those penalties pretty much signaled an end to DDGS heading to China. Those 
penalties, applied to both U.S. distillers dried grains with or without 
solubles, caused U.S. exports to China to fall from 5.4 million metric tons 
(mmt) in 2015 to 3.3 mmt in 2016.

   On November 9, 2017, China's Ministry of Foreign Affairs announced it would 
allow U.S. DDGS to be imported without charging an 11% value-added tax (VAT). 
However, the fact that penalties imposed earlier in the year remained in force, 
dampened any prospect of increased exports to China. At the time the VAT was 
removed, DDGS exports to China totaled a mere 739,000 metric tons (mt) for 2017.

   The U.S. Census Bureau said on May 3, 2018, that U.S. exports of DDGS 
totaled 905,558 mt in March, down 12% from a year ago. Mexico was the top 
export destination again in March, accounting for 17% of the total, followed by 
Vietnam, South Korea, Thailand and Indonesia. The first three months of the 
year, DDGS exports were down 13% in 2018 from a year ago. As you can see, 
China's absence is obvious.

   Cordero said there is still uncertainty facing U.S. DDGS exports. "In 2018, 
the U.S. faces additional challenges both on tariff and non-tariff barriers," 
said Cordero. Another challenge he noted are restrictive government policies 
abroad such as fumigation, GMO and other trade barriers that affect both bulk 
and container exports. However, Codero noted that domestic consumption is 
higher and that has kept prices firm for quite some time.

   USGC has been tireless in its pursuit of other buyers for U.S. DDGS and has 
been successful in educating other countries as to the value of U.S. DDGS in 
their feed rations. USGC has said that the success of their efforts is the 
result of identifying leading companies in the market, learning the unique 
concerns and barriers to greater DDGS use, extensive technical preparation, and 
effective communication with existing and potential customers all over the 
world. 

   One example is the increase of DDGS to South Korea. South Korea currently 
ranks as the second largest market for U.S. DDGS in the current marketing year 
(September 2017-March 2018), purchasing 639,000 mt, a 6% increase 
year-over-year, according to a recent report by USGC. South Korea was the third 
largest market for U.S. DDGS in 2016-17, setting a new record for the fifth 
year in a row at 979,000 mt. Following significant work by USGC to introduce 
and advocate for it in South Korea, DDGS is now considered an established and 
superior feed ingredient there, with 96% of local feed producers using it in 
their rations.

   USGC has said it will continue working to increase U.S. DDGS exports to 
South Korea and other countries through additional educational programs aimed 
at protecting existing market share, increasing the inclusion rates in animal 
diets, and expanding business opportunities between U.S. suppliers and other 
buyers.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
High Water Temporarily Closes Two Mississippi River Locks

   Above average precipitation in the south and the Ohio River Valley have kept 
the Lower Mississippi River (LMR) at high water levels for an unprecedented 
period of over 60 days. Tom Russell, Russell Marine Group said that, "High 
water safety protocols have slowed barge traffic movements from St. Louis to 
New Orleans. The system has been stressed due to delayed logistics."

   Farther north, as the record spring snows melted, filling the Mississippi 
River in St. Paul, Minnesota, river terminals there were unable to load barges 
until recently when the water finally started to recede. High water and minor 
flooding on the UMR and Middle Mississippi River (MMR) caused transit delays 
and tow sizes to be reduced out of St Paul.

   As the water flowed south, flooding caused the closure of Locks 16 
(Muscatine, Iowa) and Lock 17 (New Boston, Illinois) on Friday, May 11, and 
were expected to remain closed until Monday, May 14, causing major delays to 
barge traffic in the area. Until floodwaters recede below 18 feet, lock 17 will 
remained closed.

   The National Weather Service Quad Cites noted May 14 that, "With the recent 
rainfall on top of the progressing routed snow melt water, river crests may 
again be approaching major flood category. The Mississippi River at Muscatine 
was at 18.27 feet and steady; flood stage is 16.0 feet. The Mississippi River 
at New Boston was at 17.99 feet and receding; flood stage is 15.0 feet." 

   On top of those closures, high water safety protocols have slowed barge 
traffic movements from St. Louis to New Orleans. Russell said that, "As long as 
there are no extreme rain events, water levels will fall enough to allow safety 
protocols to be lifted by the second or third week of May. When safety 
protocols are lifted, logistics from Cairo to the Baton Rouge/New Orleans 
Harbors will improve. Barge deliveries to terminals in the Port will be faster 
and daylight-only docking and undocking of vessels loading midstream will be 
lifted." 

   FLOODING CONTINUES TO PUT STRAIN ON AGING LOCK AND DAMS

   Every time parts of the U.S. river system floods, more pressure is placed on 
the already aging locks and dams. Mike Cox, chief of the U.S. Army Corps of 
Engineers (USACE) Rock Island District's Operations Division, has said in the 
past that nearly all of the locks and dams on the UMR, including the Illinois 
Waterway, are experiencing varying levels of problems due do the age of the 
infrastructure. 

   As those locks and dams continue to deteriorate, especially when damaged by 
floods, the USACE has made it clear that it is "unable to adequately fund 
maintenance activities to ensure the navigation system operates at an 
acceptable level of performance." 

   Many times, only temporary repairs can be made, prolonging the possibility 
that a lock and dam could fail completely, shutting down the river for an 
extended period of time. When that happens, especially during harvest, farmers 
end up bearing the losses that would come from the inability of river terminals 
to load and transport their corn and soybeans to the Gulf for export.

   The most recent "temporary fix" was made at Lock and Dam No. 11 in Dubuque, 
Iowa, on April 24, when cracks were discovered at a mitre gate connection point 
during a routine inspection. Aaron Dunlop, USACE operations manager for the 
Mississippi River Project, said that inspectors preparing for an upcoming mitre 
gate change found the crack. Fortunately, there were already plans for new 
mitre gates to be installed. 

   This closure came less than two weeks after the first tow finally reached 
St. Paul, Minnesota, to open the 2018 shipping season, already well behind 
schedule. The 24-hour closure caused a backlog of barges that had been working 
their way north.

   On May 1, for the first time in 80 years, new permanent gates were finally 
installed by the USACE. All four mitre gates were originally installed in late 
1930 when Lock and Dam 11 was built. There have been intermittent closures as 
crews work to replace the four 110-ton gates and American Commercial Barge Line 
(ACBL reported that the lock would closed from 7 a.m. to 7 p.m. on May 11 to 
install the gates. 

   A study funded by the Mid-America Freight Coalition noted that the USACE 
estimated that backlogged maintenance costs for locks and dams on the 
Mississippi and Illinois rivers total more than $1 billion. The study concluded 
that, "Given the age and maintenance backlog, a failure at any of these 
facilities, especially the southernmost, would divert some of the transport of 
agricultural products to trucks, which in turn, would add more stress on the 
nation's highways, many of which are also in need of repair." 

   Here is a link to the entire study:

   
http://midamericafreight.org/2017/10/mafc-releases-report-looking-at-the-impact-
of-upper-mississippi-river-lock-and-dam-shutdowns-on-state-highway-infrastructur
e/ 

   President Trump noted in his January 30 State of the Union address that he 
was approving funding of $1.5 trillion for the rebuilding of bridges, highways, 
locks and dams, airports and other projects. In Trump's "Legislative Outline 
For Rebuilding America" posted on the White House website on Feb. 12, 2018, he 
said that, "My administration is committed to working with the Congress to 
enact a law that will enable America's builders to construct new, modern, and 
efficient infrastructure throughout our beautiful land." 

   Here is the link to the February 12 release of Trump's infrastructure plan: 

   https://www.whitehouse.gov/wp-content/uploads/2018/02/INFRASTRUCTURE-211.pdf 

   Fast forward to May 10 when CNBC reported that White House Press Secretary, 
Sarah Huckabee Sanders, told reporters that all of President Donald Trump's 
talk of a massive, trillion-dollar upgrade to America's infrastructure, from 
"Infrastructure Week" declarations to a 53-page plan unveiled three months ago, 
won't produce "a specific piece of legislation" in 2018.

   It goes without saying that this news is devastating for not only our 
waterways, but also to roads, bridges, water and sewer systems, railways and 
subways, airports, and harbors -- all of which are in some need of repair.

   In fact, in the American Society of Civil Engineers (ASCE) 2017 
Infrastructure Report Card, the nation's infrastructure received an average 
grade of D+. The report is an assessment of the conditions of the nation's 
infrastructure across 16 categories and is done every four years. 

   Here is a link to the 2017 report card: 
https://www.infrastructurereportcard.org/making-the-grade/report-card-history/ 

   Of the 16 categories graded by the ASCE, six of those are essential to the 
success of agriculture shipments. Those categories are bridges, which were 
graded C+, ports C+, railroads B, roads D-, levees D and inland waterways D. 
Without any specific financial help from the government, it may not be long 
before we see the "D" grade become an "F," and should that happen, the 
consequences could be devastating to the agriculture community -- especially to 
farmers whose prices and livelihood rely on timely movement of their grain.

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

   Follow her on Twitter @MaryCKenn

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