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Market Matters Blog           09/17 10:59
Lack of Pacific Northwest Export Bids Keeping New-Crop Soybean Basis in the 
Cellar
DDG Prices Lower
2018 Spring Wheat Harvest: A Mixed Bag 
DDG Prices Unchanged on Average
DDG Prices Lower 
Are You Ready? Food Safety Modernization Act Compliance Dates Near 
2018 Hard Red Winter Wheat Harvest Nearing the Finish Line
DDG Prices Mixed
Recent Livestock ELD Waiver Passed By Senate Causes Mixed Reactions 
DDG Prices Move Higher

******************************************************************************
Lack of Pacific Northwest Export Bids Keeping New-Crop Soybean Basis in the 
Cellar

   The trade war between the U.S. and China has now gone on for over two 
months, and while recent reports say there are expectations for another meeting 
"soon," between the two countries, no meeting has been officially announced. 
Now, with President Donald Trump planning to impose new tariffs on about $200 
billion of Chinese imports this week, that meeting may not happen. Still, there 
are many who believe that China will have to come back for U.S. soybeans 
regardless of any resolutions. 

   But not so fast. 

   Red River Farm Network reported on July 12 that a key China National 
Cereals, Oils and Foodstuffs Corporation (COFCO) official said in an interview 
with China's state-run newspaper, that China will be able to replace U.S. 
soybean exports with alternative sources. That includes an increase in business 
with Brazil and Argentina. The senior COFCO official also said China can buy 
more soybean meal, sunflowers and sunflower meal, canola and canola meal and 
fish meal to fill its needs. COFCO is one of China's state-owned 
food-processing holding companies. 

   It's clear that Pacific Northwest (PNW) exporters have no expectations for 
China business. Since mid-June, as the trade war talks heated up, PNW export 
bids disappeared -- not just for harvest time, but also for the first quarter 
of 2019. An exporter recently told me that any pre-contracted soybean sales had 
been shifted to other destinations.

   Frayne Olson, a crops economist/marketing specialist at North Dakota State 
University, said, "We have missed our peak sale season for new-crop soybeans, 
as PNW exporters will book October, November, December shipments in July, 
August and September." 

   Olson said that, even if the China tariffs "went away" in the near future, 
"It would take at least three months, if everything works perfectly, to get 
soybeans efficiently moving in to the PNW export channel." Olson said he has 
told the farmers he has spoken to at various meetings that they need to 
"prepare to store this year's soybean crop until at least mid-summer 2019."

   I reached out to a few elevators in North Dakota and was told that some 
exporters on the PNW have been asking elevators to roll September-October 
shuttle sales to December-January, while others just want to buy the contracts 
back. I was also told that country elevator bids will continue to vary widely 
based on what positions the elevator is in. One elevator manager said he was 
unaware of anyone at "no bid" except possibly some non-shuttle elevators.

   Without the PNW market, the market for North Dakota right now is mainly at 
the Gulf. However, Gulf- and St. Louis-delivered shuttle markets are at a 
negative basis, record lows for October, reflecting farm bids in North Dakota 
in the negative $1.80s. A shipper told me that it feels like the wide country 
October basis levels could easily push forward into November-December, and 
maybe further, without China. Friday's cost, insurance and freight (CIF) Gulf 
basis was at a seasonal low of -8X (November futures), and the rail bid 
delivered to St. Louis was -68X. 

   Just recently, BNSF Railway extended the temporary rates out of North Dakota 
to St. Louis through March. Nevertheless, as the Northern Plains soybeans flow 
to those destinations, traffic will likely become congested, probably causing 
those markets to go to no bid or even cheaper bids if they fill up.

   Olson told me that, if soybeans make a mad dash for the Gulf, it could turn 
into a "no room at the inn" scenario. "We can only push so many soybeans into 
the pipeline at a time," he said. 

   Keith Brandt, general manager of Plains Grain and Agronomy LLC in Enderlin, 
North Dakota, said, "We have been telling our growers for a long time that our 
space for soybeans this fall was going to be limited. We will take the 
contracted soybeans, but beyond that, there is no guarantee. We will have some 
space now for price later, but it won't get us through harvest. Once that 
price-later space is filled, it's cash or basis fixed. However, farmers have 
done a good job of making space at home for those extra beans."

   Brandt said that a good carry in the market is a big help. "Local processors 
have a better basis, but there is a long wait in lines, and $7.00 beans isn't 
friendly to the farmer." 

   "It will be just another chapter in the book for another harvest," added 
Brandt.

   Cory Tryan, manager of the grain department and logistics at Alton Grain 
Terminal LLC in Hillsboro, North Dakota, said: "Bean harvest has started, but 
at a slow pace for deliveries against contracts, some are binning the early dry 
stuff (9-11% moistures) on farm in case we get wet. Most of the beans are too 
green yet, but we could see harvest pick up around the 20th (of September). The 
first beans coming off are lower 40s (bushels per acre), on average, or around 
5 bushels per acre better than projected after the heat and lack of rain late 
July and first half August. So far, this is a couple of bushels over an average 
year's crop."

   Tryan said that pre-contracted beans will still come to town; however, most 
of the overrun will have to be stored on farm. The options to do this include 
older bins, buildings, newly added bins and more bags. The last choice would be 
to pile beans on the ground. 

   Piling soybeans is a big risk and could degrade the oil in their seeds, 
which is a crucial part of their value. Also, because of that oil, piled 
soybeans could rot faster. 

   Ken Hellevang, an NDSU Extension grain management specialist, told the 
Bismarck Tribune in August that farmers shouldn't store soybeans in exposed 
piles. "A 1-inch rain can spoil the top 2 to 3 feet on a pile, which is 
'devastating' in most farm operations," Hellevang told the Bismarck Tribune. 
"Storing grain in silo bags on the ground is preferable to exposed piles, but 
the beans first should be dried to 11% moisture. Drying beans will reduce 
pounds for sale by roughly 2% and can cause breakage. The bags aren't aerated 
and moisture can collect and move in them."

   One shuttle loader told me that soybeans are in "new territory" for everyone 
involved on both ends of the supply chain. Each has different positions and 
space to manage their risks, which are much higher this year at every stop 
along the chain for the harvest window.

   CAN CORN SAVE THE DAY?

   Olson said that, for now, corn would replace the normal harvest flow of 
soybeans to the PNW from North Dakota and other Northern states that typically 
ship harvest beans west. 

   The PNW supplies corn buyers in Japan on a regular schedule and also 
supplies South Korea and the Philippines. Still, posted corn basis bids for 
delivery to the PNW have been slipping lower ahead of harvest, with 
expectations that more corn will move there due to the lack of soybean bids. 
Friday's basis for BNSF shuttles delivered to the PNW was at +65Z/+70Z for 
October. Similar to the Gulf and St. Louis for soybeans, if the PNW market gets 
flooded with corn, that basis could drop as well or limit delivery time. 

   Other shuttle loaders in North and South Dakota agree that corn will be the 
main commodity shipped at harvest in order to keep space open for beans on the 
farm and at the elevator.

   "Our farmers will lean on us for dumping their corn, and we will pile corn," 
said Brandt. "The basis isn't too bad for corn, and freight should be available 
so that we can ship corn at harvest and not get too upside down."

   As of Friday, BNSF secondary shuttle freight bids for September and October 
were at no bid and offers were at -$100 per car under tariff, prices unheard of 
as harvest nears but good for shippers who need freight.

   Nevertheless, do not forget the one red light that is suddenly flashing: 
USDA recently forecast a record U.S. corn yield of 181.3 bpa, with production 
totaling 14.8 billion bushels. If that forecast comes true, we will have more 
corn than homes available for it at harvest and well in to next year.

   Stay tuned. This story is far from over.

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

   Follow her on Twitter @MaryCKenn

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

   OMAHA (DTN) -- Distillers dried grains spot prices from the 40 locations DTN 
contacted were mixed, but on average were $2 per ton lower versus one week ago 
at $132 per ton for the week ended Sept. 13. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Sept. 13 was at 109.91%. The value of DDG relative 
to soybean meal was at 42.40%. The cost per unit of protein for DDG was $4.89, 
compared to the cost per unit of protein for soybean meal at $6.55.

   DDG and all corn byproduct feed prices came under pressure Wednesday after 
the December corn futures lost 14 cents in the front month thanks to USDA 
predicting a record crop, way above market expectations. DDG supplies are still 
in good shape even after a slowdown in ethanol production last week. EIA said 
plant production slid 67,000 bpd to 1.020 million bpd during the week ended 
Sept. 7, 2.6% lower than the corresponding week in 2017.

   In its weekly DDGS price update, the U.S. Grains Council noted, "DDGS prices 
were generally down across the board; FOB Gulf indications fell $3/mt while 
container rates to Southeast Asia fell $4/mt on average. Prices fell for 
40-foot containers to Vietnam (-$5/mt), Thailand (-$3/mt) and Indonesia 
(-$3/mt); in turn, merchandisers report a flurry of buying activity in those 
markets. Finally, USDA reported that exports of U.S. DDGS are up 2.2% 
year-over-year in 2017/2018 to 10.5 mmt."


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT        PREVIOUS  CHANGE
COMPANY    STATE                               9/13/2018       9/6/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri            Dry                $145           $155     -$10
                               Modified           $75            $78       -$3
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
           Missouri            Dry                $140           $150     -$10
                               Wet                $75            $83       -$8
CHS, Minneapolis, MN (800-769-1066)
           Illinois            Dry                $142           $145      -$3
           Indiana             Dry                $135           $140      -$5
           Iowa                Dry                $135           $135      $0
           Michigan            Dry                $142           $140      $2
           Minnesota           Dry                $130           $125      $5
           North Dakota        Dry                $125           $125      $0
           New York            Dry                $162           $160      $2
           South Dakota        Dry                $125           $125      $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas              Dry                $140           $145      -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana             Dry                $136           $134      $2
           Iowa                Dry                $135           $135      $0
           Michigan            Dry                $142           $138      $4
           Minnesota           Dry                $132           $130      $2
           Missouri            Dry                $151           $151      $0
           Ohio                Dry                $144           $142      $2
           South Dakota        Dry                $135           $135      $0
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas              Dry                $130           $135      -$5
                               Wet                $40            $45       -$5
           Illinois            Dry                $147           $150      -$3
           Nebraska            Dry                $130           $135      -$5
                               Wet                $40            $45       -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois            Dry                $130           $130      $0
           Indiana             Dry                $127           $127      $0
           Iowa                Dry                $125           $125      $0
           Michigan            Dry                $130           $130      $0
           Minnesota           Dry                $120           $120      $0
           Nebraska            Dry                $135           $135      $0
           New York            Dry                $140           $140      $0
           North Dakota        Dry                $130           $130      $0
           Ohio                Dry                $130           $130      $0
           South Dakota        Dry                $120           $120      $0
           Wisconsin           Dry                $130           $130      $0
Valero Energy Corp, San Antonio Texas      (210-345-3362)     (210-345-3362)
           Indiana             Dry                $125           $130      -$5
           Iowa                Dry                $115           $120      -$5
           Minnesota           Dry                $120           $125      -$5
           Nebraska            Dry                $135           $140      -$5
           Ohio                Dry                $135           $140      -$5
           South Dakota        Dry                $120           $125      -$5
           California                             $185           $190      -$5
Western Milling, Goshen, California (559-302-1074)
           California          Dry                $200           $205      -$5
*Prices listed per ton.
           Weekly Average                         $132           $134      -$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   9/13/2018 $3.3625   $120.09
                    Soybean Meal   9/13/2018 $311.30
   DDG Weekly Average Spot Price     $132.00
                      DDG Value Relative to:  9/13      9/6
                                        Corn 109.91%   106.14%
                                Soybean Meal  42.40%    43.09%
                   Cost Per Unit of Protein:
                                         DDG   $4.89     $4.96
                                Soybean Meal   $6.55     $6.55
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

   

******************************************************************************
2018 Spring Wheat Harvest: A Mixed Bag 

   The drought-stricken spring wheat harvest of 2017 is now a distant memory, 
as farmers overall reported a decent harvest in 2018. But some did face 
roadblocks along the way. 

   Farmers in North Dakota, South Dakota, Montana and northwest Minnesota had 
to wait for the late-spring snow to melt and the ground to thaw, as the 
calendar days for planting slipped away. On top of that, hail hit some of the 
spring wheat areas that were hit hard by drought last year, affecting some of 
the acres that were on tap to produce good yields.

   In its most recent harvest report on Sept. 7, the U.S. Wheat Associates 
(USW) said that the hard red spring wheat harvest is closing in on completion 
with mostly dry weather forecast during the last week. 

   According to the report, average protein content is unchanged from last week 
at 14.7%, not much higher than the 2017 final of 14.6%. Test weight average is 
61.7 pounds per bushel (lbs./bu) compared to last year's final average of 61.6 
lbs./bu. Falling number average is over 400 seconds, indicating sound wheat. 
Average vitreous kernel content (DHV) is 90% to make the average grade of the 
crop at this time No. 1 Dark Northern Spring (1DNS). "Industry sources report 
that the crop looks very good with strong yields and high protein," added USW.

   In South Dakota, one of the states hit hardest by drought last year, farmers 
and elevator managers reported mixed results for this harvest. 

   "We got hail on July 9 on about half our spring wheat acres, and the damage 
on those acres was 25% to 35%," said Ryan Wagner of Wagner Farms near Roslyn, 
South Dakota. "On the non-hailed acres, our yields this year were a bit below 
what we have seen the last four years, but still respectable. I think this was 
mostly due to the late planting and heat in May and June, but we were pleased 
with the yields all things considered."  

   Wagner told me that quality was very good overall and protein ran a bit 
higher than the past few years, with most of it falling in the mid to upper 
14.0%. 

   "On higher-yielding years, sometimes we struggle to break the 14% mark so 
it's nice to have some high-pro wheat in the bin," Wagner said. "Test weight 
has held in there at or above 60 lbs./bu, even though we struggled to get 
harvest wrapped up due to many later starts because of foggy morning and having 
to shut down early because of humidity in between the intermittent rain 
showers. Even when the sun did shine, it seemed like it was always being 
filtered by smoke and haze from the wildfires, which didn't help, so a lot of 
the wheat came off at 15% moisture or higher and is now drying in the bin."

   Wagner said another big issue with the crop this year was weed control.

   "Typically, you can count on an early canopy to help you out, but with most 
of the crop planted in mid-May followed by the rapid warm up, the wheat wasn't 
as good at keeping ahead of the weeds like it does most years so there were 
some weed control issues in the area," he said. 

   Jerry Cope, who does the grain marketing for Dakota Mill & Grain Inc. in 
Rapid City, South Dakota, told me that harvest was a "good one" with yields of 
30 to 50-plus bushels per acre (bpa). "Acres were up slightly from last year 
due to a carryover of fields meant for wheat in the rotation, but didn't get 
planted last fall," he said.

   Cope said that the protein average was higher than one year ago at 15%, and  
 test weight was more than adequate at 60-plus lbs./bu, while dockage was well 
under 1%. 

   "The spring wheat came off during the tail end of the price rally. Combined 
with the flip-flop of spring wheat this year at a lower cash price than winter 
at any given protein, has kept more than normal at home," concluded Cope.

   Tim Luken, manager at Oahe Grain, Onida, South Dakota, said: "In the Onida 
area, spring wheat harvest was not fast and furious; just steady eddy. The 
quality of the crop was excellent with no issues of any scab. Of course, 
harvest was much better than last year due to the drought our area had.

   "At the end of June, Sully County had two major hail events that consumed 
about 30% of the county. This event took out a mixed bag of all crops, and it 
most definitely made a difference on what we took in this year; a lot less than 
I thought at the beginning. As far as other grading factors go, we averaged 61 
lbs./bu test weight and protein average was 15.4%. We did see some light test 
weight at the tail end of harvest in the 53- to 55-pound range. Harvest on a 
whole was later than most years. We started with winter wheat harvest on July 9 
and ended with spring wheat harvest around the 9th of August; all in all, a 
week later than average."

   Brian Kjesbo, who farms in Wendell, Minnesota, told me that he was 
pleasantly surprised with the spring wheat harvest. "The combination of a 
later-than-ideal start and very warm conditions during tillering had us 
concerned. We planted a U of M variety that matures early and is known for good 
quality and standability. Our yields were above our farm average with 62 
lbs./bu test weight and 14.3% pro."

   Kjesbo added: "We were fortunate to finish harvest in early August before 
the region got into a persistently wet cycle. I'd say over half the wheat in 
the area ended up fighting tough harvest conditions and some loss of quality."

   Nathan Olsonawski of Hallock, Minnesota, said: "Overall, the spring wheat 
was slightly better than average for yield. Quality was above average with 
excellent test weight and protein for our area. We did not have any disease 
issues with the dry summer that we have had."

   Tim Dufault, who farms in Crookston, Minnesota, said: "The 2018 wheat 
harvest in northwest Minnesota and eastern North Dakota was dry. The hard red 
spring wheat came off with no weather delays. The dry summer weather helped 
quality but took its toll on the yield.

   "This made for excellent quality. Wheat buyers and millers will love this 
crop. Every bushel we harvested had beautiful dark red color. All test weights 
were over 60 lbs./bu. Protein varied based on varieties, but region wide looks 
like it should land between 14.0% to 14.4%. Yields were down from last year 
region wide and on my farm. I'll average around 70 bpa versus my last year 
yield of 75 bpa. From what I have heard via area elevators buyers and growers, 
I think the region will land in the 60-66 bpa. Again, down from last year's 
crop."

   Dufault said he thought a good, soaking rain in July could have put another 
5 bpa to 7 bpa on this crop. 

   "There were some fields with fusarium or head scab showing up," Dufault 
said. "Bacteria leaf streak was the most pronounced disease affecting this 
crop. It was region wide. But, it is hard to say how much yield it robbed from 
this crop."

   Cory Tryan, manager of the grain department and logistics at Alton Grain 
Terminal LLC in Hillsboro, North Dakota, told me that harvest was as expected 
after the "Memorial Day massacre (temperatures in the mid-90s) and the blow 
torch during filling (winds and 90s)."

   He said the yield in his territory was 65 bpa and verified widely at 40 bpa 
to 80 bpa, down 10 bpa from their past four-year average of mid to upper 70s. 

   "Protein ranged from 12.5 to 16.9 and was 14.8% on average, up 0.8 from our 
past four-year average of 14.0%," Tryan said. "The test weight was 62 lbs./bu, 
down from usual 63, and our falling numbers were average in the 400+ ranges. 
There was disease present in fields not managed well, but overall was not an 
issue. Our vomitoxin was less than 1 ppm (part per million) versus our usual of 
less than 0.5 ppm and our color (DHV) was good, similar to past years in mid to 
upper 60s."

   Tryan told me that the majority of the wheat went to the farm bin after 
pre-contracts were delivered and there was very little delivered over that.

   Kerry Baldwin of Hope, North Dakota, said that their yield was good, 
considering the wheat wasn't planted until May 20. 

   "We were really wet this spring and that caused the late planting," Baldwin 
said. "Yields were in the low 60s, which I was satisfied with. Protein was in 
the 13.8% to 14.8% range, and test weight ranged from 60 to 64 lbs./bu. 
Overall, quality was excellent. We sprayed a fungicide on our wheat so very 
little disease pressure."

   Allan Klain, who farms northwest of Turtle Lake, North Dakota, said: "It was 
perfect weather for wheat harvest (soybeans not so much), and we harvested all 
our wheat without a rain on it. Quality was excellent at 61 lbs./bu with 
protein 15% and higher. Our yield was way better than we expected. I had some 
fields I was ready to spray out to beans because of emergence issues, but we 
had timely rains so didn't need to. We had a very small non-economical level of 
scab, and it did not affect yield or quality. All in all, this was probably my 
best yielding and quality crop ever. A lesson learned, don't write off a crop 
early; wheat is resilient."

   Allan Rohrich of Rohrich Farms near Zeeland, North Dakota, said: "We had a 
very quick harvest for the most part. We were able to harvest almost nonstop 
without rain, so color and test weight are excellent. Yields were 40 bpa to 65 
bpa. Test weight was excellent at 60-62 lbs./bu, and protein seems to be a bit 
higher this year; one variety has 15%-16.5% and the other right around 14%. Our 
harvest was about what we expected for the year as we were either right at APH 
(actual production history yield) or just below."

   Jeff Kittell, merchandiser for Border Ag and Energy in Russell, North 
Dakota, told me that the wheat yield surprised everyone. "We should see 
averages in the 50-plus-bushel range and protein in 14% range and overall a 
good, clean milling crop." 

   Keith Brandt, general manager of Plains Grain and Agronomy LLC in Enderlin, 
said that North Dakota had less than 5% of the wheat harvest left. 

   "The balance will drag out for the next two weeks," said Brandt. "Our wheat 
yields are at 55 bpa to 60 bpa, 5 bpa to 7 bpa less than a year ago. The 
protein average is 14.5% and grade is a #1NS. We have seen some ergot, but we 
can live with what came to town and blend to 0.05 or lower."

   In north-central Montana, Todd LaPlant, elevator manager at EGT LLC in 
Kintyre Flats, said: "Our draw area averaged 35 bpa, which is around the 
five-year average for northeastern Montana and near our expectations going into 
harvest. Our test weight was 60-plus lbs./bu and good protein with no ergot 
issues in our area." 

   This area was under a severe drought last summer, with over 65% of the state 
affected, and many farmers losing thousands of acres of wheat. In addition, 
Montana experienced one of its worst wildfire seasons on record with over 1 
million acres torched throughout the state because of the bone-dry landscape.

   THE ELEPHANT IN THE ROOM: ERGOT

   When anyone talks about ergot, a fungus that grows on the seed head of 
cereal grains and grasses, it's usually in a hushed tone. All buyers will run 
from any mention of grain that may be infected with it. Ergot is toxic to 
animals, and all domestic animals are susceptible -- including birds -- but 
cattle seem to be the most susceptible.

   The United States Standards for Wheat labels "ergoty" wheat, containing more 
than 0.05% of ergot, as "Special Grades and Special Grade Requirements." This 
means it is not part of the regular wheat grade and is subject to rejection by 
the buyer. The loss to a farmer and/or a reseller can be costly if a buyer 
becomes spooked by traces of ergot. Any flour or feed made from ergot-infected 
cereals, such as wheat, will still be toxic.

   The problem with ergot-infected wheat is that the toxicity cannot be reduced 
by cleaning or through processing. There is a chance that ergot may be cleaned 
out by using a gravity table, but sometimes the ergot kernel is larger than the 
wheat kernel, making it difficult to remove.  

   As I compiled comments for this story from different areas in North and 
South Dakota, Montana and Minnesota, this is what I heard from some farmers and 
elevators:

   -- "I heard there was some ergot in the area, but it was not an issue for us 
and disease pressure seemed to be minimal this year."

   -- "Ergot was just over the threshold and seemed to show up primarily in 
wheat that was drought stressed early, then experienced uneven flowering with 
second and third tillers after the early June rains. Between farmer awareness 
and elevator education, a good job has been done of isolating problem wheat."

   -- "Ergot was present on a few loads but it was few and far between at best. 
Nothing the elevator couldn't work with."

   -- "Our varieties did not have ergot, but it is out there. While I was in 
line with a semi to unload at an elevator, they were unloading a train car that 
graded 0.07 ergot after loading."

   -- "We did see a bit of ergot on our farm, but so far is has not been 
something that is above the threshold for discounts."

   -- "Ergot has shown up, but not near as bad as some in the trade has made it 
out to be. They are making it out to be a bigger problem than it really is and 
causing panic in the trade."

   -- "We saw two fields where you could see a few kernels of ergot. Otherwise, 
the new crop produced pretty clean, good milling wheat."

   -- "Had to send some wheat home with higher ergot levels than accepted, so 
will have to deal with it later."

   -- "We did not have any ergot."

   In summary, those I spoke with (that saw some ergot), were able to work with 
it or rejected the wheat, while others noted no sign of it or not enough to 
show up in the final grade. There are pockets of ergot that do exist, but from 
what I have heard, it is not an epidemic.

   Here are some links to North Dakota State University about ergot:

   
https://www.ag.ndsu.edu/carringtonrec/center-points/ergot-and-cattle-feed-don201
9t-mix 

   
https://www.ag.ndsu.edu/cpr/plant-pathology/ergot-being-reported-in-wheat-08-16-
18 

   
https://www.ag.ndsu.edu/burleighcountyextension/hot-topics/2018-hot-topics/ndsu-
extension-warns-against-ergot-contaminated-feeds 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Unchanged on Average

   OMAHA (DTN) -- Distillers dried grains (DDG) spot prices from the 40 
locations DTN contacted were mixed, but on average remained steady versus one 
week ago at $134 per ton for the week-ended Sept. 6. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended Sept. 6 was at 106.14%. The value of DDG relative to 
soybean meal was at 43.09%. The cost per unit of protein for DDG was $4.96, 
compared to the cost per unit of protein for soybean meal at $6.55.

   Domestic demand was slowed by the long weekend and a slight improvement in 
pasture conditions across the country for the week ending Sept. 2. Tuesday's 
USDA Crop Progress report showed very poor conditions were 2 points better at 
10%; poor was unchanged at 18%; fair was unchanged at 30%, good rose 2 points 
to 36% and excellent was unchanged at 6%. In addition, there is plenty of DDG 
supply available as ethanol plant production continues to move higher. This 
latest report from the Energy Information Agency showed plant production rose 
to 1.087 million barrels per day (bpd) during the week-ended Aug. 31, a 
four-week high and 2.5% higher than the same week in 2018.

   In its weekly DDGS price update, the U.S. Grains Council noted, "DDGS prices 
were mostly down from last week, though adjustments were minor as the market 
moved sideways. DDGS at the Gulf fell $1/metric ton (mt) to $202/MT (September 
delivery). Prices for 40-ft. containers to Southeast Asia were down $2/mt on 
average; containers to Japan fell $6/mt. U.S. rail rates were down $2/mt from 
last week. Merchandisers reported sales to Vietnam and Indonesia in an 
otherwise quiet week."

   The U.S. Census Bureau said Wednesday that U.S. exports of DDGS totaled 
1,107,891 mt in July, up 11% from a year ago. Turkey was the top destination in 
July, accounting for 17% of U.S. exports, while Mexico was a close second. The 
first seven months of U.S. DDGS exports were up 4% in 2018 from a year ago.


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                                9/6/2018       8/30/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $155           $160       -$5
                              Modified           $78             $80       -$2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
          Missouri            Dry                $150           $150       $0
                              Wet                $83             $83       $0
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $145           $150       -$5
          Indiana             Dry                $140           $140       $0
          Iowa                Dry                $135           $130       $5
          Michigan            Dry                $140           $130       $10
          Minnesota           Dry                $125           $125       $0
          North Dakota        Dry                $125           $120       $5
          New York            Dry                $160           $130       $30
          South Dakota        Dry                $125           $120       $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $145           $145       $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $134           $140       -$6
          Iowa                Dry                $135           $132       $3
          Michigan            Dry                $138           $138       $0
          Minnesota           Dry                $130           $130       $0
          Missouri            Dry                $151           $149       $2
          Ohio                Dry                $142           $142       $0
          South Dakota        Dry                $135           $130       $5
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $135           $135       $0
                              Wet                $45             $45       $0
          Illinois            Dry                $150           $150       $0
          Nebraska            Dry                $135           $135       $0
                              Wet                $45             $45       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $130           $135       -$5
          Indiana             Dry                $127           $130       -$3
          Iowa                Dry                $125           $125       $0
          Michigan            Dry                $130           $135       -$5
          Minnesota           Dry                $120           $120       $0
          Nebraska            Dry                $135           $135       $0
          New York            Dry                $140           $145       -$5
          North Dakota        Dry                $130           $135       -$5
          Ohio                Dry                $130           $135       -$5
          South Dakota        Dry                $120           $125       -$5
          Wisconsin           Dry                $130           $135       -$5
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $130           $130       $0
          Iowa                Dry                $120           $120       $0
          Minnesota           Dry                $125           $125       $0
          Nebraska            Dry                $140           $140       $0
          Ohio                Dry                $140           $140       $0
          South Dakota        Dry                $125           $125       $0
          California                             $190           $190       $0
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $205           $204       $1
*Prices listed per ton.
          Weekly Average                         $134           $134       $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                                      9/6/2018       $3.5350   $126.25
Soybean Meal                              9/6/2018       $311.00
DDG Weekly Average Spot Price             $134.00
DDG Value Relative to:                                   9/6       8/30
Corn                                                     106.14%   110.02%
Soybean Meal                                             43.09%    44.45%
Cost Per Unit of Protein:
DDG                                                      $4.96     $4.96
Soybean Meal                                             $6.55     $6.35
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 Lower 

   OMAHA (DTN) --Distillers dried grains (DDG) spot prices versus two weeks ago 
from the 40 locations DTN contacted were mixed, but on average posted a loss of 
$5 per ton at $134 per ton for the week-ended Aug. 30. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended Aug. 30 was at 110.02%. The value of DDG relative to 
soybean meal was at 44.45%. The cost per unit of protein for DDG was $4.96, 
compared to the cost per unit of protein for soybean meal at $6.35. 

   Domestic demand has been fairly steady, as pasture conditions vary 
throughout the country. Monday's USDA Crop Progress report showed very poor 
conditions gained by 1 point to 12%; poor was at 18%; fair dropped 1 point to 
30%, very good was at 34% and excellent was at 6%. Drought conditions have been 
hard on many pastures, especially in Texas, Missouri, Colorado, Arizona and 
California.

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
at the Gulf fell again this week to $203/metric ton (MT) (September delivery). 
Prices for 40-ft. containers to Southeast Asia were down $4/MT on average, 
while containers to South Korea and Taiwan fell $5/MT and $4/MT, respectively. 
U.S. rail rates were mostly unchanged. Asian buyers are active as prices become 
more attractive; merchandisers reported sales to Indonesia and Vietnam for 
September. Container availability is plentiful, depending on the carrier."


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT     PREVIOUS CHANGE
                                                      8/16/
COMPANY   STATE                         8/30/2018      2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri          Dry            $160        $160     $0
                            Modified       $80         $80      $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri  Dry                 $150         $160        -$10
Wet              $83           $80          $3
CHS, Minneapolis, MN (800-769-1066)
          Illinois          Dry            $150        $155    -$5
          Indiana           Dry            $140        $145    -$5
          Iowa              Dry            $130        $135    -$5
          Michigan          Dry            $130        $135    -$5
          Minnesota         Dry            $125        $125     $0
          North Dakota      Dry            $120        $125    -$5
          New York          Dry            $130        $140    -$10
          South Dakota      Dry            $120        $125    -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas            Dry            $145        $140     $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana           Dry            $140        $147    -$7
          Iowa              Dry            $132        $135    -$3
          Michigan          Dry            $138        $142    -$4
          Minnesota         Dry            $130        $130     $0
          Missouri          Dry            $149        $153    -$4
          Ohio              Dry            $142        $147    -$5
          South Dakota      Dry            $130        $132    -$2
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas            Dry            $135        $121    $14
                            Wet            $45         $40      $5
          Illinois          Dry            $150        $158    -$8
          Nebraska          Dry            $135        $121    $14
                            Wet            $45         $40      $5
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois          Dry            $135        $150    -$15
          Indiana           Dry            $130        $145    -$15
          Iowa              Dry            $125        $130    -$5
          Michigan          Dry            $135        $145    -$10
          Minnesota         Dry            $120        $125    -$5
          Nebraska          Dry            $135        $150    -$15
          New York          Dry            $145        $165    -$20
          North Dakota      Dry            $135        $135     $0
          Ohio              Dry            $135        $150    -$15
          South Dakota      Dry            $125        $125     $0
          Wisconsin         Dry            $135        $145    -$10
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
          Indiana           Dry            $130        $140    -$10
          Iowa              Dry            $120        $130    -$10
          Minnesota         Dry            $125        $125     $0
          Nebraska          Dry            $140        $130    $10
          Ohio              Dry            $140        $145    -$5
          South Dakota      Dry            $125        $125     $0
          California                       $190        $202    -$12
Western Milling, Goshen, California (559-302-1074)
          California        Dry            $204        $210    -$6
*Prices listed per ton.
          Weekly Average                   $134        $139    -$5
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   8/30/2018 $3.4100   $121.79
                    Soybean Meal   8/30/2018 $301.40
   DDG Weekly Average Spot Price     $134.00
                      DDG Value Relative to:  8/30     8/16
                                        Corn 110.02%   106.55%
                                Soybean Meal  44.45%    41.54%
                   Cost Per Unit of Protein:
                                         DDG   $4.96     $5.15
                                Soybean Meal   $6.35     $7.04
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

******************************************************************************
Are You Ready? Food Safety Modernization Act Compliance Dates Near 

   The third major compliance date will soon arrive for the 
preventive-controls-for-animal-food rule under the FDA Food Safety 
Modernization Act. By Sept. 17, 2018, facilities that are small animal food 
businesses must comply with preventive controls (PC) requirements mandated by 
FSMA. Facilities that are large businesses were required to comply by September 
2017. Large businesses are those with 500 or more full-time equivalent 
employees, and small businesses are those with fewer than 500 such employees. 

   The FDA noted on its website that the compliance dates for the Preventive 
Controls and Current Good Manufacturing Practice requirements were staggered 
for animal food companies. Facilities that are large and small businesses had 
to meet the CGMP requirements earlier; by September 2016, and September 2017, 
respectively. Very small animal food facilities will be required to meet the 
CGMPs on Sept. 17, 2018.

   Since September 2016, some members of the food industry and grain trade 
associations such as the National Grain and Feed and American Feed Industry 
Association have expressed concern and uncertainty about many of the FSMA rules 
and enforcement measures. The FDA has since granted revisions/extensions on 
many of the issues in question, with the most recent one granted in August.

   The FDA announced on Aug. 14, 2018 that they would extend its deadlines and 
inspection timeframes for when certain sized facilities should come into 
compliance with some FSMA rules and regulations.

   In a recent press release, the AFIA praised the FDA announcement. 

   "By extending these deadlines, the FDA will have more time to release the 
final FSMA guidance documents and train its inspectors, while the regulated 
animal feed industry will have greater opportunity to perform the necessary 
retrofits to animal food safety plans and processes to ensure full compliance 
with federal regulations," said the AFIA.

   "Throughout the rulemaking process, AFIA has asked the agency to take a 
staggered approach to implementation to allow the industry time to focus on 
current good manufacturing practice implementation and also to receive the 
necessary guidance to properly implement the hazard analysis and risk-based 
preventive controls requirements," said Leah Wilkinson, AFIA's vice president 
of public policy and education. "AFIA applauds the agency for continuing to 
offer this staggered approach and flexibility as the industry implements these 
broad, sweeping regulations."

   AFIA also noted that the additional nine months provides small-sized 
facilities (those with sales totaling less than $2.5 million and certified to 
the FDA) the same opportunity that the FDA granted to large-sized facilities 
August 2017, to learn and implement the rules and regulations. 

   The NGFA said in an Aug. 14 newsletter that FDA's announcement means that 
although the compliance date for small businesses for the preventative control 
requirements remains the same, the agency will delay performing routine 
surveillance inspections to evaluate compliance until the fall of 2019. In 
addition, FDA will delay routine inspections for compliance with preventative 
control provisions that apply to very small businesses until the fall of 2020.

   "Significantly, if FDA becomes aware of an animal food safety incident 
associated with a small business on or after the compliance date and needs to 
conduct a for-cause inspection to investigate the issue, the inspection will 
evaluate compliance with the PC requirements," said NGFA. 

   The NGFA gave the following examples of when FDA may conduct a for-cause PC 
inspection include if: 

   1) There is a history of violating samples (product or environmental) 
2) The facility's food is subject to a recall 
3) The facility has made a reportable food registry report involving a 
potential hazard 
4) Significant observations were made during a previous inspection 
5) The facility is subject to enforcement actions taken by FDA or state 
regulatory agencies.

   TRAINING SESSIONS ONGOING

   The Minnesota Grain and Feed Association and North Dakota Grain Dealers 
Association are two of many trade groups that have been holding training 
sessions since the FSMA rules were first published by the FDA. They will be 
co-sponsoring one final opportunity for affected firms to "get up to speed" 
with the requirements contained in the FSMA for the upcoming compliance date 
for the animal food safety rule. 

   Attendees will get an overview of the updated regulation as well as the 
requirements for compliance. The goal is for attendees to understand FSMA and 
know what they need to do bring their facility into compliance whether they 
operate a feed, food or grain facility. The day will conclude with a Q&A with 
all of the presenters in a panel format, so attendees' questions can be 
answered. The meeting is scheduled for Wednesday, Aug. 29 at the Courtyard by 
Marriott in Moorhead, Minn. 

   Here is a link to registration: 

   https://www.ndgda.org/events/fmsa-workshop 

   The NGFA has worked tirelessly offering training classes as well and has 
focused on FSMA regulations and compliance at many of their conferences. The 
next opportunity to attend a conference that will have "a strong focus on FSMA 
compliance" is their Feed and Pet Food Joint Conference, an annual 
collaboration between the NGFA and the Pet Food Institute designed specifically 
for feed and pet food sectors. 

   The conference will feature several industry leaders and education sessions 
that will provide the latest information to guide feed and pet food companies 
"through a complex regulatory environment as the U.S. Food and Drug 
Administration's (FDA) continues to implement the Food Safety Modernization 
Act." The ninth-annual Feed and Pet Food Joint Conference is scheduled for 
Sept. 17-19 in St. Louis, Missouri. 

   Here is a link to the conference information and registration:

   
http://events.r20.constantcontact.com/register/event?oeidk=a07effxlg8z99946781&l
lr=fdr65vnab&showPage=true 

   If you are unable to attend any sessions mentioned above or other training 
sessions, the links below are from the FDA website and may answer your 
questions on all of the FSMA rules. 

   This link, titled "What to Expect With the Next Compliance Dates for the 
FSMA Preventive Controls for Animal Foods Rule," has a Q&A with Jenny Murphy, a 
consumer safety officer at FDA's Center for Veterinary Medicine and also, note 
on that the left side of the web page, you will find all the links to FSMA:

   
https://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm570439.htm?utm_campaign=CFSA
NCU_PCAF_08142018&utm_medium=email&utm_source=Eloqua&elqTrackId=9cbf90e86c7142d3
bce288bf51b1e952&elq=00d8c59072c44f628b37bef8f8f737f5&elqaid=4628&elqat=1&elqCam
paignId=3673 

   Here a link that will take you directly to Compliance Dates: 
https://www.fda.gov/food/guidanceregulation/fsma/ucm540944.htm 

   Take the time to look these over to be sure that you are either exempt from 
some or all of the FSMA rules, or what you need to do to be compliant if you 
are required to comply. If you are still unsure, click on this link that 
informs you how to get answers to any questions by either submitting your 
question on line or in writing by mail: 
https://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm459719.htm 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
2018 Hard Red Winter Wheat Harvest Nearing the Finish Line

   As of Friday, Aug. 17, U.S. Wheat Associates (USW) noted in their weekly 
harvest update that other than a few acres in Wyoming, the 2018 HRW harvest 
progress is now limited to Montana (71% complete), Washington (74% complete) 
and Idaho (74% complete).

   USW said that Washington, Oregon and Idaho continue to report a very good 
crop with high test weights, but generally lower protein than other HRW 
wheat-producing areas. Kansas finished harvest in early July and saw lower 
yields due to drought, but reported good quality.

   After touring the wheat fields in Kansas and northern Oklahoma this past 
April with the Wheat Quality Council, I wasn't expecting much in the way of 
yields as drought gripped most of both states, with many of the fields we 
inspected showing the stress. Those of us on the tour did see some hope if 
timely rains fell, but some spots were beyond help.

   Moisture did come for some, but others received hail with the rain. Jeanne 
Falk Jones, Multi-County Specialist in Agronomy at Kansas State University 
Research and Extension in the Sunflower District, told Kansas Wheat in their 
July 16 harvest report that, "I cover Wallace, Sherman and Cheyenne counties, 
and from what I've seen the variable of wheat has been driven by hail," Jones 
said. "Wheat that wasn't harvested was because it got hit with a lot of hail."

   Jones told Kansas Wheat that, "Truly it was hail that was the name of the 
game," Jones said. "What could have been really high potential wheat was lost 
during the hail storms."

   Jones added that, "We are thankful for the wheat that we got during the 
growing season. We had a few really good past harvests, and this year was kind 
of a letdown. The dry conditions just really took it out on the wheat."

   Scott Van Allen, who farms in Sumner County, Kansas, told me that harvest 
went very fast with excellent weather. "The wheat was very short because of the 
dry fall, winter and spring," he said. "We had no moisture from Oct. 21, 2017, 
till March 21, 2018. Yields were from 21 bpa (bushels per acre) to 46 bpa. I 
don't have any individual protein results but the overall was 12.5% to 13%. 
Test weights were all over with some at 60 pounds, some 64 pounds. All in all, 
a lower than average harvest as yields go, but the quality helps with the 
marketing."

   In the Aug. 10 USDA Supply and Demand Report, Kansas was forecast to harvest 
277 million bushels with a yield forecast of 38 bpa, down 10 bpa from 2017 due 
to the extended drought. 

   Farmers in South Dakota saw a better harvest than one year ago when drought 
caused many of them to either zero out acres or bale them for feed. While acres 
planted for winter wheat were lower last fall, down 9% from the prior year, 
results were good; except for the lost acres due to two hailstorms that moved 
through north central South Dakota this past summer.

   Tim Luken, manager at Oahe Grain, Onida South Dakota, told me that, "Winter 
and spring wheat harvest in the Onida area started July 9, and we finished the 
first week in August. Winter wheat harvest yields where all over the map and 
the June 27 and June 29 hail events didn't help matter any either. Not only did 
this cut our acres of winter wheat, but as a whole winter wheat acres are 
dwindling in the state."

   Luken said his yields on winter wheat ranged from 25 bpa all the way to the 
best I heard of 94 bpa, and this was across my scale. "I was hearing a lot of 
50 bpa to 60 bpa overall," said Luken. "Quality was excellent with no vom 
(vomitoxin) or scab issues at all. It was nice to see a crop come in and not 
have any quality issues this year. This year, the average test weight was 60.8 
and our protein was 13.5%; this is the highest average protein I have ever seen 
in the 11 years I have been here."

   In the Aug. 10 USDA Supply and Demand Report, South Dakota was forecast to 
harvest 37.2 million bushels (up 79% from 2017) with a yield forecast of 51 
bpa, up 11 bpa from 2017 when drought covered the state. 

   Montana farmers planted 150,000 fewer acres of winter wheat last fall than 
they did the season before after being shut out in 2017 from one of the worst 
droughts in 10 years that covered nearly the whole state. This year, Montana 
wheat farmers are expected to have one of their best harvests, according to 
various sources in the state.

   Todd LaPlant, elevator manager at EGT LLC, Kintyre Flats, Montana, told me 
that very little winter wheat was planted last fall in eastern Montana. "But, 
what we have seen at harvest this year has been excellent quality of 61 lbs and 
12.5% pro on average," he said. 

   USW noted in their harvest update report that Montana continues to report 
very good yields, very good test weights and very good protein, though planted 
area was lower this year in the state. "With some variation between southern 
and northern regions, the Montana Grain Lab reported that overall the crop is 
averaging 63 pounds and 12.6% protein," noted USW.

   In the Aug. 10 USDA Supply and Demand Report, Montana was forecast to 
harvest 75.4 million bushels versus 66.8 in drought-stricken 2017 with a yield 
forecast of 52 bpa, up 10 bpa from 2017. If Montana hits that mark, the 2018 
yield would be a record.

   Oklahoma Wheat Commission reported on their website in early July that 98% 
of the winter wheat in the state had been harvested. "Quality for the 2018 
wheat crop across Oklahoma will be favorable with high test weights and high 
proteins. Test weights on average will range from 60 to 62 pounds, with reports 
on protein running 12.5% to 13%," noted the report. 

   While quality is expected to be high, the USDA in the Aug. 10 report 
estimated the Oklahoma wheat harvest at 55 million bushels versus 98.6 in 2017, 
with a yield forecast of 25 bpa, down 6 bpa from 2017. Like Kansas, Oklahoma 
faced drought conditions in the fall, winter and spring, which contributed to 
the lower harvest acres.

   Overall, the USDA forecast total HRW hard red winter production in the U.S. 
at 661 million bushels versus 750 million bushels in 2017. Lower planted acres 
and drought conditions in many of the key winter wheat states caused the lower 
production this year.

   USW noted that the consensus among industry sources is that the quality of 
the 2018 HRW wheat crop ranks among the best that U.S. farmers have produced in 
many years.

   HIGH PROTEIN CROP CAUSES PROTEIN PRICE SPREAD TO NARROW 

   The USW weekly harvest report on Aug. 17 showed that with harvest nearly 
done in the Northern Plains and western U.S., the overall 2018 protein average 
was at 12.5% versus 11.5% in 2017 and 11.2% in 2016. That's good news for 
mills, but not great news for farmers with higher protein. 

   Remember that flour mills' flavor of choice is 12% protein when it comes to 
making flour. While flour mills make a 13% protein flour, the most common is a 
mid-mix, 12% protein flour. One thing to note is that 1% of the wheat protein 
is lost in the flour-making process.

   Mills will want to blend the 2018 crop with old-crop and have been paying 
better prices for the lower proteins. The spot premium spread between ords 
(below 11%) and 14% started to narrow ahead of harvest because higher protein 
was expected out of Kansas and Oklahoma due to drought conditions. On Friday, 
Aug. 17, spot ords were at +120KCU, 11% to 12% proteins were at +140KCU and 13% 
through 14% were at +150KCU. On June 27, the day basis rolled to the September 
futures, ords were quoted at +92KCU, 11% through 12% proteins were quoted at 
+127KCU to +162KCU and 13% through 14% was quoted at +177KCU to +182KCU.

   The same holds true for wheat at the Gulf as far as blending the new-crop 
down to meet export specs. The Gulf 12% protein basis saw the same effect on 
basis as the milling prices, with 12% protein on Aug. 17 quoted at +120KCU and 
ords quoted at +85KCU. On June 29, 12% protein was quoted +146KCU with ords 
quoted at +98KCU.

   The one bright spot for HRW wheat prices has been the strength in the flat 
price thanks to futures rallying over production issues in the EU, and just 
recently, rallying over unconfirmed reports that that Russia's Ag Ministry "may 
have" mentioned curbing grain exports due to lower production there. Should 
this happen, that could mean good news for U.S. exports, which are currently 
moving at a snail's pace in relation to USDA forecast for 2018-19 exports. 

   Traders are doubtful this will take place, but this is not the first time it 
has been reported and then denied by the Russian AG Ministry. However, remember 
that Russia and Ukraine halted wheat exports in 2010-11 because of 
lower-than-expected crop production in 2010. They also imposed various 
restrictions in the form of higher export taxes as well, which in turn slowed 
exports there.

   The bottom line is that if any of the above should take place, it will be 
music to the ears of U.S. exporters and producers.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Mixed

   OMAHA (DTN) -- The distillers dried grains (DDG) spot prices from the 40 
locations DTN contacted were mixed, but on average posted a gain of $1 per ton 
at $139 per ton for the week-ended Aug. 16. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended Aug. 16 was at 106.55%. The value of DDG relative to 
soybean meal was at 41.54%. The cost per unit of protein for DDG was $5.15, 
compared to the cost per unit of protein for soybean meal at $7.04. 

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
at the Gulf fell this week as markets softened somewhat in response to the 
recent WASDE report. This dynamic has Asian buyers, among others, showing 
renewed interest. DDGS FOB Gulf are at $208 for September shipment. Container 
rates to Southeast Asia are down on average $7 per metric ton (mt) from last 
week, while container rates to Bangladesh and Myanmar are mostly unchanged. 
Container rates to Japan are down $4/mt from last week and stand at $247/mt for 
September shipment. Merchandisers reported sales to Indonesia and Vietnam."

   Another reason for the weakness in the Gulf prices is due to the currency 
collapse in Turkey along with the deteriorating relationship between the U.S. 
and Turkey. Remember that Turkey is the second biggest U.S. DDGS buyer and 
unless their financial situation and the tension with the U.S. changes, a delay 
or possibly even a stoppage for U.S. DDGS export business there could result.


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT        PREVIOUS  CHANGE
COMPANY    STATE                               8/16/2018       8/9/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri            Dry                $160           $160      $0
                               Modified           $80            $80       $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
           Missouri            Dry                $160           $160      $0
                               Wet                $80            $80       $0
CHS, Minneapolis, MN (800-769-1066)
           Illinois            Dry                $155           $156      -$1
           Indiana             Dry                $145           $148      -$3
           Iowa                Dry                $135           $138      -$3
           Michigan            Dry                $135           $144      -$9
           Minnesota           Dry                $125           $125      $0
           North Dakota        Dry                $125           $125      $0
           New York            Dry                $140           $142      -$2
           South Dakota        Dry                $125           $125      $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas              Dry                $140           $140      $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana             Dry                $147           $147      $0
           Iowa                Dry                $135           $127      $8
           Michigan            Dry                $142           $142      $0
           Minnesota           Dry                $130           $127      $3
           Missouri            Dry                $153           $152      $1
           Ohio                Dry                $147           $147      $0
           South Dakota        Dry                $132           $117      $15
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas              Dry                $121           $121      $0
                               Wet                $40            $40       $0
           Illinois            Dry                $158           $158      $0
           Nebraska            Dry                $121           $121      $0
                               Wet                $40            $40       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois            Dry                $150           $150      $0
           Indiana             Dry                $145           $145      $0
           Iowa                Dry                $130           $130      $0
           Michigan            Dry                $145           $145      $0
           Minnesota           Dry                $125           $125      $0
           Nebraska            Dry                $150           $150      $0
           New York            Dry                $165           $165      $0
           North Dakota        Dry                $135           $135      $0
           Ohio                Dry                $150           $150      $0
           South Dakota        Dry                $125           $125      $0
           Wisconsin           Dry                $145           $145      $0
Valero Energy Corp, San Antonio Texas      (210-345-3362)     (210-345-3362)
           Indiana             Dry                $140           $145      -$5
           Iowa                Dry                $130           $128      $2
           Minnesota           Dry                $125           $120      $5
           Nebraska            Dry                $130           $130      $0
           Ohio                Dry                $145           $150      -$5
           South Dakota        Dry                $125           $120      $5
           California                             $202           $210      -$8
Western Milling, Goshen, California (559-302-1074)
           California          Dry                $210           $213      -$3
*Prices listed per ton.
           Weekly Average                         $139           $138      $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                                      8/16/2018      $3.6525   $130.45
Soybean Meal                              8/16/2018      $334.60
DDG Weekly Average Spot Price             $139.00
DDG Value Relative to:                                   8/16      8/9
Corn                                                     106.55%   104.64%
Soybean Meal                                             41.54%    41.31%
Cost Per Unit of Protein:
DDG                                                      $5.15     $5.11
Soybean Meal                                             $7.04     $7.03
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

******************************************************************************
Recent Livestock ELD Waiver Passed By Senate Causes Mixed Reactions 

   The recent one-year extension to the electronic logging device (ELD) waiver 
for livestock haulers and live insect haulers recently passed by the Senate has 
caused mixed reactions throughout the trucking industry. The Advocates for 
Highway and Auto Safety (Advocates) and the Trucking Alliance (Alliance) have 
been longtime opponents to any waivers to the mandate.

   Earlier in the year, the Advocates said in a press release on their website 
that, "ELDs are a common sense lifesaving technology and any attempts to bow to 
special interests and delay full enforcement of the ELD rule would only make 
our roads more dangerous." Along with the Alliance, Advocates has been a 
strong, early supporter of requiring ELDs in all trucks and of the ELD rule. 
"ELDs are a known remedy for the well-documented public safety hazard of driver 
fatigue," said the Advocates.

   Lane Kidd, Managing Director of the Alliance for Driver Safety & Security, 
stated in the same press release, "When it comes down to whether this or that 
segment of the trucking industry should abide by rules that can reduce large 
truck crashes, the government should have one standard, and that is 'a truck is 
a truck is a truck.' We shouldn't allow outliers to skirt public safety 
regulations. Trucking companies have a moral and ethical responsibility to keep 
the public's trust, that they are operating as safely as possible, and ELDs are 
a huge step in achieving that objective."

   The Aug. 1 passing of a minibus bill by the Senate included an extension of 
the waiver to install ELD's that would replace the current deadline date of 
Sept. 30, 2018, for livestock and insect haulers. Since then, a poll conducted 
by the Commercial Carrier Journal (CCJ) showed that more than half of the 
poll's respondents (57%) said the waiver should not be extended, while the 
remaining 43% saw the need for the waiver to be prolonged.

   THE REAL PROBLEM FOR INSECT AND LIVESTOCK HAULERS: HOURS OF SERVICE RULE

   Hours of service (HOS) requirements have always been in place prior to the 
ELD. However, they were difficult to enforce because they could, in effect, be 
adjusted on the paper records. With an ELD, there is no flexibility available 
for drivers, especially ones whose time runs out with a live load before they 
reach their destination.

   In the Aug. 3 article showing poll results, CCJ said that 18% of poll 
respondents said regulators should focus on altering hours of service 
regulations for livestock haulers, rather than granting them another year to 
run on paper logs. 

   Under the current HOS rules, livestock haulers are allocated 11 hours of 
drive time and 14 hours of on-duty time. Once they hit their hours, the ELD 
will basically force drivers off the road to take their mandatory 10-hour 
break. The concern of the livestock industry has always been that if the ELD 
(in essence) clocks a driver out while drivers have a load in transit, it could 
be detrimental to the safety of the livestock and/or live insects. 

   Both the United States Cattlemen's Association (USCA) and the National 
Cattlemen's Beef Association (NCBA) support the ELD extension for that very 
reason. In a Facebook post on Aug. 1, after the Senate passed an amendment that 
would extend the ELD waiver for livestock haulers by one year, the USCA said, 
"This DOES NOT mean that we have one more year of an exemption, just that the 
OPPORTUNITY is now available to get an additional year-long exemption. The 
budget bills still have a few more hurdles yet to face this year - including 
the President's desk.

   "Nevertheless, this is a HUGE step forward and we are very appreciative of 
the work done by Sen. Fischer's staff and others in securing this delay! Please 
continue calling your members of Congress to ensure this issue is at the top of 
their list of priorities, especially as we head into the back half of the 
year," added USCA.

   The USCA also said on Facebook that, "The way things are moving in Congress 
now, we will not get our HOS solution before our exemption runs out on Sept. 
30. This additional one-year delay would give us another shot at our bill -- 
the Transporting Livestock Across America Safely Act."

   Nebraska Senator Ben Sasse set that bill in motion on May 23, 2018, to 
require the Secretary of Transportation to modify provisions relating to hours 
of service requirements with respect to transportation of livestock and 
insects, and for other purposes. In a press release on his website, Sasse noted 
that the rigidity of current HOS laws "jeopardizes the welfare of hogs, cattle, 
insects and other livestock." 

   Here is a link to the full bill: 

   
https://www.congress.gov/bill/115th-congress/senate-bill/2938/text?format=txt 

   Truck drivers in all segments have said in various articles that the ELD is 
not the problem, the current HOS rule is. Many have said being stuck in 
traffic, slowed by road construction and/or sitting at a final destination, 
waiting to be unloaded counts against the HOS clock. Valuable time becomes 
wasted and with the ELD clock running, they cannot make up those hours.

   The bottom line in all of this is that there needs to be a solution that 
protects the safety of not just live animals and insects being transported, but 
primarily, the safety of all drivers; regardless of what vehicle they are 
driving on the roads.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Move Higher

   OMAHA (DTN) -- The distillers dried grains (DDG) spot prices from the 40 
locations DTN contacted were up $4 per ton, on average, at $138 per ton for the 
week-ended Aug. 9. According to merchandisers, prices continue to move higher 
partially due to a shortage of trucks to haul DDG, especially in states where 
some trucks have been pulled away for harvest. 

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week-ended Aug. 9 was at 104.64%. The value of DDG relative to 
soybean meal was at 41.31%. The cost per unit of protein for DDG was $5.11, 
compared to the cost per unit of protein for soybean meal at $7.03. 

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
container rates to Asia were generally up this week, with 40-foot containers to 
the Philippines seeing an increase of $6 per metric ton (mt) from last week. 
Containers to Taiwan, Indonesia, Malaysia, Vietnam, China and Japan were up as 
well. Activity in Asian markets remains brisk, with merchandisers reporting 
sales to Indonesia and Vietnam amid a period of strengthening prices. FOB 
vessel U.S. Gulf for August shipment is $220/mt. In analyzing historical data, 
DDGS at the Gulf continue their steady increase that started in early 2017."

   A merchandiser told DTN that there is talk of container freight increases to 
the Gulf and California in September, which has some buyers shying away from 
booking in September. But there is nothing official yet as far as an increase. 

   The U.S. Census Bureau said on Aug. 3 that U.S. exports of distillers dried 
grains with solubles (DDGS) totaled 1,034,917 metric tons in June, up 16% from 
a year ago. Mexico took the top spot with 18% of exports in June, followed 
closely by Turkey. South Korea, Vietnam, Indonesia, and Thailand took the next 
four spots, as U.S. DDGS remain popular in Asia. The first six months of U.S. 
DDGS exports were up 3% in 2018 from a year ago.


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT        PREVIOUS  CHANGE
COMPANY    STATE                                8/9/2018       8/2/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri            Dry                $160           $155      $5
                               Modified           $80            $75       $5
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
           Missouri            Dry                $160           $155      $5
                               Wet                $80            $80       $0
CHS, Minneapolis, MN (800-769-1066)
           Illinois            Dry                $156           $156      $0
           Indiana             Dry                $148           $148      $0
           Iowa                Dry                $138           $135      $3
           Michigan            Dry                $144           $144      $0
           Minnesota           Dry                $125           $120      $5
           North Dakota        Dry                $125           $120      $5
           New York            Dry                $142           $142      $0
           South Dakota        Dry                $125           $120      $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas              Dry                $140           $135      $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana             Dry                $147           $145      $2
           Iowa                Dry                $127           $125      $2
           Michigan            Dry                $142           $140      $2
           Minnesota           Dry                $127           $125      $2
           Missouri            Dry                $152           $150      $2
           Ohio                Dry                $147           $145      $2
           South Dakota        Dry                $117           $115      $2
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas              Dry                $121           $121      $0
                               Wet                $40            $35       $5
           Illinois            Dry                $158           $158      $0
           Nebraska            Dry                $121           $121      $0
                               Wet                $40            $35       $5
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois            Dry                $150           $145      $5
           Indiana             Dry                $145           $140      $5
           Iowa                Dry                $130           $125      $5
           Michigan            Dry                $145           $140      $5
           Minnesota           Dry                $125           $125      $0
           Nebraska            Dry                $150           $125      $25
           New York            Dry                $165           $150      $15
           North Dakota        Dry                $135           $120      $15
           Ohio                Dry                $150           $145      $5
           South Dakota        Dry                $125           $120      $5
           Wisconsin           Dry                $145           $140      $5
Valero Energy Corp, San Antonio Texas      (210-345-3362)     (210-345-3362)
           Indiana             Dry                $145           $140      $5
           Iowa                Dry                $128           $117      $11
           Minnesota           Dry                $120           $115      $5
           Nebraska            Dry                $130           $120      $10
           Ohio                Dry                $150           $145      $5
           South Dakota        Dry                $120           $115      $5
           California                             $210           $205      $5
Western Milling, Goshen, California (559-302-1074)
           California          Dry                $213           $213      $0
*Prices listed per ton.
           Weekly Average                         $138           $134      $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                                      8/9/2018       $3.6925   $131.88
Soybean Meal                              8/9/2018       $334.00
DDG Weekly Average Spot Price             $138.00
DDG Value Relative to:                                   8/9       8/2
Corn                                                     104.64%   102.30%
Soybean Meal                                             41.31%    40.26%
Cost Per Unit of Protein:
DDG                                                      $5.11     $4.96
Soybean Meal                                             $7.03     $7.01
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

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

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