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Market Matters Blog           04/07 14:58
NGFA, Ag Groups Ask States to Raise and Harmonize Truck Weight Limits 
DTN Weekly DDG Offers Slim 
Can Retail Purchasing Surge Make Up for Food-Service Losses?
The Rapid Demise of the Corn Basis
Few Offers for DTN Weekly DDG Prices 
Headed to the Bread Lines 
Bread and Flour Demand Rises as Consumers Clear Grocery Store Shelves
As Coronavirus Related Closures Continue, 2020 UMR Navigation Season Opens
DTN Weekly Average DDG Price Surges
Trucking Hours of Service Relief Declared During National Emergency

NGFA, Ag Groups Ask States to Raise and Harmonize Truck Weight Limits 

   The federal Coronavirus Aid Relief and Economic Security Act (CARES) was 
signed into law on March 26 and includes language requested by the Department 
of Transportation (DOT) to clarify state authority to issue special permits for 
increased truck weight. Under either a "major Disaster" or "emergency," states 
can issue special permits for heavier trucks to deliver relief supplies, 
ensuring the validity of state-issued special permits. The U.S. DOT authority 
allows states to "increase truck weight limits on U.S. and federal interstate 
highways within their jurisdictions during the COVID-19 emergency."

   Many states have temporarily suspended rules regarding oversized and 
overweight loads of food, medical supplies and other household goods, and 
basically any goods needed during the pandemic. Louisiana, Mississippi, Iowa, 
Georgia, Maryland, North Carolina, Nebraska, Illinois, South Carolina, 
Wisconsin and Missouri are some of the states that allowed permitted weight 
changes, but many of them are not in harmony as far as weight limits. That can 
cause an issue for drivers who load heavy in one state but may need to cross in 
to a state that has different weight limits.

   On March 30, the National Grain and Feed Association (NGFA) and more than 60 
national agricultural groups urged each state to increase truck weight limits 
on highways within their jurisdiction to a "minimum harmonized weight" of 
88,000 pounds.

   "Increased truck weights improve the food and agriculture industry's 
efficiency and capacity to deliver essential food, feed and key ingredients 
which sustain our food supply chain," the groups said in a letter to all state 
governors, lieutenant governors, transportation directors and agriculture 
commissioners. "This will become more critical if the availability of truck 
drivers is impacted adversely by COVID-19," noted the letter. Here is a link to 
the letter: 

   In an April 2 webinar, sponsored by the NGFA, Max Fisher, NGFA vice 
president of economics and government relations, provided an overview on hours 
of service, truck weight and licensing changes amid the challenging COVID-19 
landscape. "I recommend that anyone who wants to use these higher limits to 
reach out to your state department of transportation to verify the products 
that qualify for these higher weight limits, if your state has raised them," 
Fisher said to the more than 900 attendees on the webinar.

   "Many states already have increased truck weight limits on some or all of 
the highways within their state," said Fisher. "NGFA and other agricultural 
organizations are encouraging state governments to raise truck weight limits to 
a minimum of 88,000 pounds on all of the roads within their state, while 
respecting bridge and posted seasonal or special road and/or local limitations."


   The NGFA also noted that for first time ever at the national level and 
through at least April 12, U.S. DOT has waived hours-of-service (HOS) rules for 
drivers transporting "essential items" for the pandemic relief effort, noted 
the NGFA during the webinar.

   -- Some examples of essential items are all medical supplies, supplies and 
equipment necessary for community safety, fuel and food, paper products and 
other groceries for emergency restocking.

   -- Drivers do not need an official document to use the waiver for the 
pandemic relief effort.

   -- U.S. DOT has specifically listed livestock, animal feed and fertilizer as 
eligible for HOS relief because they are "precursor" to "essential items," 
i.e., food. However, pet food is listed as ineligible.

   -- Note: drivers transporting agricultural commodities, such as grain and 
feed, but not including processed products, already were exempt from HOS rules 
as long as they are within 150 air miles of the origin of the load.

   On the issue of pet food being ineligible for the HOS relief, Fisher noted 
that, "One would think that if fertilizers are considered a precursor to food, 
and feed is considered a precursor to food that grain would be as well. 
Unfortunately, that's a bit of a gray area and we've asked USDA if they would 
be willing to reach out to U.S. DOT to get that clarified, but U.S. DOT still 
has not."

   In addition, the NGFA, along with multiple food and ag groups, wrote a 
letter on March 25 to the Federal Motor Carrier Safety Administration (FMCSA) 
noting that the HOS relief was insufficient to adequately encompass the major 
beginning and middle segments of the food and agricultural supply chain. "Our 
members already are experiencing a tightening in trucking capacity and 
disruptions in truck transport in certain states and regions given 
state-imposed restrictions related to COVID-19. To address this situation, we 
strongly urge you to expand and extend the HOS relief from farm-to-fork, 
specifically by including raw and processed agricultural commodities, animal 
food and feed ingredients, processed food and food ingredients, honey bees and 
farm supplies to adequately preserve the resiliency of our nation's food supply 
during the pandemic."

   The letter went on to note that food processers, animal feeding and pet food 
operations require a steady supply of raw and processed agricultural 
commodities, animal food and feed ingredients, and they often are not located 
within 150-air miles of their shipping point. "Further, U.S. agricultural 
exports, and by extension the agriculture supply chain, depend upon the ability 
to efficiently transport agricultural products (food, farm, fiber) to 
international maritime export gateways, by truck, either to seaports or to rail 
ramps, both often well in excess of 150 miles from the origin farms, storage or 
processing facilities," added the NGFA. 

   "We urge FMCSA to extend the hours-of-service relief to include all food and 
agricultural critical infrastructure operations to ensure the viability of the 
food distribution system." Here is a link to the NGFA March 25 letter: 

   With all of the changes taking place recently, Fisher added, "A good 
business practice is to check with your state DOT on changes to the trucking 
rules during COVID-19."

   The NGFA has dedicated space on their website for all COVID-19 industry 

   Mary Kennedy can be reached at 

   Follow her on Twitter @MaryCKenn

DTN Weekly DDG Offers Slim 

   OMAHA (DTN) -- Many of the plants DTN contacted for DDG prices for the week 
ended April 2 showed no offers, but some did post prices. One plant that posted 
prices told DTN supplies were very limited and another said some plants that 
have slowed or stalled production are looking to buy out of existing contracts 
because they don't have enough product. Feeders have had to move away from all 
forms of DDG in their rations and have turned to corn, soymeal, corn gluten 
feed or other substitutes.

   Wednesday's Energy Information Administration ethanol report showed blending 
demand fell over 30% to the lowest level on record for the last week of March, 
while plant production dropped for a fourth week, falling more than 15% to the 
lowest level since late September 2013. The data also shows domestic ethanol 
inventories soared to a record high. 

   Plant operators cut production 16.4% to 840,000 barrels per day (bpd) during 
the week ended March 27, down 16% versus the same time one year ago and the 
lowest level since the week ended Sept. 20, 2013, at 832,000 bpd. Thus, DDG 
supplies have become extremely tight.

   In its weekly update, the U.S. Grains Council noted DDG is priced at 160% of 
cash corn values, up from last week and above the three-year average of 106%. 
"The DDGS/cash corn ratio is at its highest level since 2016. The DDGS/soymeal 
price ratio is 0.56, up from the prior week and above the three-year average of 

   In the export market, USGC noted, "Merchandisers report ongoing 
short-covering in the DDGS CIF market for April and that while demand is strong 
heading into April, logistics are tightening quickly. Industry sources report 
that some April sales have been rolled back to May to accommodate this. FOB 
NOLA offers are up $7/mt this week for April shipment and up $15/mt for May. 
U.S. rail rates are slightly lower while prices for 40-foot DDGS containers to 
Southeast Asia are up $1-2/mt for spring positions."

   The U.S. Census Bureau said Thursday U.S. exports of DDGS totaled 852,904 mt 
in February, down from 976,688 mt in January, but up 24% from a year ago. 
Mexico was the top destination in February, taking 19% U.S. exports and 
followed by South Korea, Indonesia and Vietnam. For the first two months of 
2020, U.S. exports of DDGS were up 23% from a year ago.

   NOTE: All prices listed below can change at any time and are subject to 
confirmation from seller.

COMPANY     STATE                            4/2/2020      3/26/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
            Missouri                 Dry       $220           $0          $0
                                     Wet       $110           $0          $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
            Missouri                 Dry       $220          $220         $0
                                     Wet       $115          $115         $0
CHS, Minneapolis, MN (800-769-1066)
            Illinois                 Dry        $0            $0          $0
            Indiana                  Dry        $0            $0          $0
            Iowa                     Dry        $0            $0          $0
            Michigan                 Dry        $0            $0          $0
            Minnesota                Dry        $0            $0          $0
            North Dakota             Dry        $0            $0          $0
            New York                 Dry        $0            $0          $0
            South Dakota             Dry        $0            $0          $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
            Kansas APRIL             Dry       $185          $185         $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
            Indiana                  Dry       $215          $215         $0
            Iowa                     Dry       $200          $195         $5
            Michigan                 Dry       $200          $190        $10
            Minnesota                Dry       $205          $195        $10
            Missouri                 Dry       $215          $210         $5
            Ohio                     Dry       $215          $210         $5
            South Dakota             Dry       $210          $195        $15
United BioEnergy, Wichita, KS (316-616-3521)
            Kansas                   Dry        $0            $0          $0
                                     Wet        $0            $0          $0
            Illinois MARCH           Dry        $0            $0          $0
            Nebraska                 Dry        $0            $0          $0
                                     Wet        $0            $0          $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
            Illinois                 Dry        $0            $0          $0
            Indiana                  Dry        $0            $0          $0
            Iowa                     Dry        $0            $0          $0
            Michigan                 Dry        $0            $0          $0
            Minnesota                Dry        $0            $0          $0
            Nebraska                 Dry        $0            $0          $0
            New York                 Dry        $0            $0          $0
            North Dakota             Dry        $0            $0          $0
            Ohio                     Dry        $0            $0          $0
            South Dakota             Dry        $0            $0          $0
            Wisconsin                Dry        $0            $0          $0
Valero Energy Corp, San Antonio Texas
            Indiana                  Dry        $0            $0          $0
            Iowa                     Dry        $0            $0          $0
            Minnesota                Dry        $0            $0          $0
            Nebraska                 Dry        $0            $0          $0
            Ohio                     Dry        $0            $0          $0
            South Dakota             Dry        $0            $0          $0
            California               Dry        $0            $0          $0
Western Milling, Goshen, California (559-302-1074)
            California               Dry        $0            $0          $0
*Prices listed per ton.

   Mary Kennedy can be reached at

   Follow her on Twitter @MaryCKenn

Can Retail Purchasing Surge Make Up for Food-Service Losses?

   With COVID-19 changing daily buying habits for most consumers, the effect of 
"social distancing" is significantly affecting the food chain. Once life gets 
back to normal, many studies are likely to be done on how consumer eating 
patterns changed through the virus pandemic. 

   In a pre-virus generation where eating out, rather than buying food and 
cooking it at home, was becoming normal, the shift over the last month where 
many food-service suppliers have either closed or scaled back is significantly 
shaking up demand in the food chain. There are many changes being seen in 
retail food demand. Through the early stages of the pandemic, consumer buying 
surged at retail locations; this caused a surge in demand for most food 
products, such as meat, dairy and flour. However, the biggest change that 
cannot be seen by the consumer, at least on a short-term basis, is how these 
buying surges will affect overall demand for these products.

   Given the massive change in buying patterns in such a short period of time, 
the entire food-service network has been significantly affected. The 
food-service network not only includes restaurants, but institutions such as 
hotels, catering, cafeterias and school food programs. Not only do these 
sectors make up a significant portion of demand, this segment of business also 
was steadily growing. 

   The food-service marketspace is also more reliant on larger purchases, some 
of which are contracted months in advance. An example would be school districts 
purchasing milk for student lunches. It is estimated that school lunches 
account for 7% of all fluid milk demand. With most schools now recessed due to 
COVID-19, this is a significant segment of the fluid dairy market that is up 
for grabs. Cheese used for pizza continues to be the staple for dairy products, 
and even though many pizza chains are striving to keep business going by 
increasing deliveries and takeout specials, the long-term effect on dairy 
demand may be significant. 

   When it comes to meat demand, the question is whether consumers will 
maintain the same buying and eating patterns as they were when eating out. 
Given the uncertainty in the economy at this time, will consumers tend to buy 
high-value meat products, such as steak, roasts and pork loins? Or will this 
retail demand be met by increased ground meat demand, which is typically the 
lower end of the price scale at the meat counter? 

   It is too early to tell where the final numbers for each meat product will 
land, but a quickly changing pattern in buying has the potential to limit 
long-term demand. The longer social distancing continues and the more 
stay-at-home orders that are issued by government agencies, the more likely it 
is damage will be done to demand for many of the perishable food products 
(products that consumers can't store for a long period of time). For most 
products in most areas, panic buying and hoarding seems to have slowed 

   Even though demand for food at the supermarket remains strong and the 
food-service industry is trying to stay above water in these challenging 
conditions, the abrupt change of how and where the average consumer buys their 
food is likely to shake up the industry well after the COVID-19 issues are over.

   Rick Kment can be reached at   

The Rapid Demise of the Corn Basis

   The national average corn basis started the new-crop year 23 cents stronger 
than the five-year average basis. As of the first week of March, the national 
average basis was at -12K, peaking at 20 cents stronger than the five-year 
average. For the fourth week of March, the national average basis was at -26K, 
14 cents weaker than the start of the month. As you can see on the chart 
accompanying this column, the corn basis has been riding high above the 
five-year strongest basis. Until now.

   That all changed when the coronavirus pandemic began to pull gasoline prices 
below $1 per gallon and, in turn, pulled ethanol prices lower as well. The 
cheaper price of gas, now at a steep discount to ethanol (41.2 cents), has 
deeply stressed plant margins, causing many ethanol plants to slow production 
or go offline for now. In turn, plants either pulled corn bids or posted 
sharply weaker bids in the past few weeks.

   Why does that matter? Nearly 40% of U.S. corn is used for ethanol 
production. That strong demand for ethanol production has resulted in higher 
corn prices over the years and has provided incentives for farmers to increase 
corn acreage, according to the USDA ERS Feb. 26, 2020, report "Feedgrains 
Sector at a Glance." 

   Here is a link to the report with more info on U.S. corn usage:

   A farmer on social media sent me a note reporting that basis in his area in 
eastern Wisconsin weakened 30 cents to 40 cents at the local ethanol plant the 
past three weeks, with elevators in that area who ship there also weakening 
basis levels. Another farmer posted a note saying ethanol plants were 
"slashing" basis, an obvious sight we have all witnessed and more so in the 
last seven days. 

   Tim Luken, manager of Oahe Grain Corporation in Onida, South Dakota, told 
me, "Like everywhere else, ethanol plant corn basis levels collapsed even here 
in central South Dakota from -20 cents in January and now at -70 cents for 
March and April. I did hear ethanol plants are running at 50% to 60% capacity." 

   Luken noted that current bids are now for export corn. "But, our problem is 
that we have light test weight. There is a large amount of wet corn in the bins 
around here. When we do dry higher-moisture and light-test-weight corn, our 
broken corn and foreign material really increases, adding to our quality 
issues. That is just another issue many elevators have to deal with, along with 
producers in our area. I just hope producers are watching their bins and taking 
precautions while unloading."  

   It's no secret that the current export market for corn has been below 
average compared to last year. The March 26 weekly export sales and shipments 
were a nice surprise for corn. USDA reported that, for the week ended March 19, 
there was an increase of 71.4 million bushels (mb) (1,814,300 metric tons) of 
corn export sales for 2019-20 and an increase of 3.3 mb (82,900 mt) for 
2020-21. While the year-to-date total improved a little with last week's 
report, corn commitments remain down 28% for this crop year versus last year at 
the same time. 

   I contacted Angie Setzer, vice president of grain at Citizens LLC in 
Charlotte, Michigan, and I asked her what effect the slowdown in ethanol plants 
is having on basis in her area. 

   "We've seen values drop as much as 75 cents at one location, with a 40-cent 
drop being more in line, I would say, with average loss," said Setzer. 

   I asked her if her elevator was still open for limited business given the 
cheaper basis and possible lack of available ethanol plant business.

   "We're open for business, but our facility is not necessarily one that takes 
in a lot of grain outside of harvest," said Setzer. "Obviously, the rail market 
still has potential to heat up as we move forward, but at this time, it appears 
the feed market is really the only game in town." 

   She told me that new-crop basis was much wider than old-crop values being 
paid before the drop, so she hasn't seen a drop there at this point in time. 

   "Without a major change in ethanol outlook or rail values, a drop could 
definitely be in the cards," added Setzer. 

   "There are a lot of bushels in the bin on the countryside still. Many have 
been doing something at the very least; while others that were caught somewhat 
flatfooted have said they are willing to wait until summer to see if things 
change. I have had a few farmers looking at different additions to their 
rotations at the expense of corn acres. Some are looking to non-GMO soybeans 
because of the premiums offered by elevators in the state. Others are looking 
to crops they may not have thought about in a while. One customer mentioned he 
might be looking to grow dry beans this year, which is something I haven't seen 
around here in several years," concluded Setzer.

   Until ethanol plants can run at full production, the corn basis will 
struggle. The next question is whether that will have an impact on corn acres 
this spring. I did a quick survey on Twitter of the many farmers I follow 
throughout the country. Here are the final results of that poll with 218 

   Question: Hey #AgTwitter, given the weakness in cash corn/basis will you 
change your 2020 corn planting intentions? 

   A: Yes, planting less acres. (36.7%)

   B: Not changing intentions. (63.3%)

   Depending on what the next month brings for the value of cash corn, some 
farmers may rethink corn planting intentions in the Midwest. 

   Here are links to related corn market stories published by DTN:

   "The Argument Tilts Back to Soybeans" by DTN Lead Analyst Todd Hultman:

   "Corn Gets Crushed by Plunging Crude Oil, Ethanol, Gasoline" by DTN Senior 
Analyst Dana Mantini:

   Mary Kennedy can be reached at 

   Follow her on Twitter @MaryCKenn

Few Offers for DTN Weekly DDG Prices 

   OMAHA (DTN) --Most of the plants DTN contacted for DDG prices for the week 
ended March 26 went to no offers, while a few places did post prices. One plant 
that posted prices told DTN his supplies were limited. Given the very few 
offers out there, it is obviously hard to define this market. However, some 
plants that do show offers are posting truck prices as high as $50 above what 
their prices were just two weeks ago in some regions.

   It is no secret plant margins have suffered from the coronavirus-related 
losses in the energy complex, and specifically, gasoline and ethanol prices. 
Ethanol prices have become higher than gasoline, which is a detriment to plant 
margins, because it has a negative effect on blending. The U.S. consumer's 
driving habits have changed dramatically as many states have asked residents to 
stay home or shelter in place and only go out for essential needs, which in 
turn drastically affects the use of gasoline.

   On March 2, April ethanol futures were at $1.28 per gallon versus April RBOB 
at $1.54 per gallon, putting RBOB at a 26-cent premium to ethanol. As of March 
26, the April ethanol futures were at $0.970 versus April RBOB at $0.5438, 
putting ethanol at a 42.6-cent premium over RBOB. Plant margins have become 
stressed and many plants have slowed production, with some going offline 

   Wednesday's Energy Information Administration data showed domestic ethanol 
production dropped for a third straight week, sliding 3% to a 23-week low in 
the week ended March 20, while blending demand dropped to the lowest level in 
six weeks, and inventories were drawn down. EIA showed U.S. ethanol supply was 
down 458,000 barrels (bbl) from last week to 24.140 million bbl, a seven-week 
low and down 1.2% from the same week last year.

   In turn, DDG production has also slowed and supplies have become thin. Many 
plants that still have product are busy filling existing sales. This has pretty 
much shut down the spot market, which is evident in plants where you see no 

   In its weekly update, the U.S. Grains Council noted, that DDG is priced at 
133% of cash corn values, up from last week and above the three-year average. 
"The DDG/cash corn ratio is at its highest level since July 2016. The 
DDG/soymeal price ratio is 48.00%, steady with the prior week and above the 
three-year average of $42.00%." 

   In the export market, USGC noted, "This week, barge CIF NOLA values are up 
$22 per metric ton (mt) for April shipment while FOB Gulf values are up $16/mt. 
The market for rail delivered DDGS is exceptionally strong as well, with rates 
to the PNW and California up $45/mt or more for April shipment. 
Internationally, offers for containerized DDGS to Southeast Asia are reflecting 
strong demand, with the average rate rising $28/mt for April positions and 
$35/mt for May. The average value for containers to Southeast Asia hit $311/mt 
this week."

   Merchandisers report that DDGS exports in April will be strong and that 
trend may likely continue into May as well. Expectations are that prices for 
deferred shipments will rally later this spring following the current rise in 
spot values, with demand likely remaining strong amid a tight supply pipeline, 
added USGC. 

   NOTE: All prices listed below can change at any time and are subject to 
confirmation from seller.

COMPANY      STATE                            3/26/2020     3/19/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
             Missouri                 Dry        $0             $0        $0
                                      Wet        $0             $0        $0
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
             Missouri                 Dry       $220           $185       $35
                                      Wet       $115           $95        $20
CHS, Minneapolis, MN (800-769-1066)
             Illinois                 Dry        $0             $0        $0
             Indiana                  Dry        $0             $0        $0
             Iowa                     Dry        $0             $0        $0
             Michigan                 Dry        $0             $0        $0
             Minnesota                Dry        $0             $0        $0
             North Dakota             Dry        $0             $0        $0
             New York                 Dry        $0             $0        $0
             South Dakota             Dry        $0             $0        $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
             Kansas APRIL             Dry       $185           $160       $25
POET Nutrition, Sioux Falls, SD (888-327-8799)
             Indiana                  Dry       $215           $170       $45
             Iowa                     Dry       $195           $160       $35
             Michigan                 Dry       $190           $160       $30
             Minnesota                Dry       $195           $160       $35
             Missouri                 Dry       $210           $170       $40
             Ohio                     Dry       $210           $170       $40
             South Dakota             Dry       $195           $160       $35
United BioEnergy, Wichita, KS (316-616-3521)
             Kansas                   Dry        $0             $0        $0
                                      Wet        $0             $0        $0
             Illinois MARCH           Dry        $0             $0        $0
             Nebraska                 Dry        $0             $0        $0
                                      Wet        $0             $0        $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
             Illinois                 Dry        $0             $0        $0
             Indiana                  Dry        $0             $0        $0
             Iowa                     Dry        $0             $0        $0
             Michigan                 Dry        $0             $0        $0
             Minnesota                Dry        $0             $0        $0
             Nebraska                 Dry        $0             $0        $0
             New York                 Dry        $0             $0        $0
             North Dakota             Dry        $0             $0        $0
             Ohio                     Dry        $0             $0        $0
             South Dakota             Dry        $0             $0        $0
             Wisconsin                Dry        $0             $0        $0
Valero Energy Corp, San Antonio Texas
             Indiana                  Dry        $0             $0        $0
             Iowa                     Dry        $0             $0        $0
             Minnesota                Dry        $0             $0        $0
             Nebraska                 Dry        $0             $0        $0
             Ohio                     Dry        $0             $0        $0
             South Dakota             Dry        $0             $0        $0
             California               Dry        $0             $0        $0
Western Milling, Goshen, California (559-302-1074)
             California               Dry        $0             $0        $0

   Mary Kennedy can be reached at

   Follow her on Twitter @MaryCKenn

Headed to the Bread Lines 

    The speed that news and markets are changing seems faster than ever. The 
news cycle feels seconds-long and volatility in markets can leave the 
deep-pocketed searching through couch cushions. One of the more impressive 
features in ag markets of late has been the surge in buying by wheat mills as 
they scramble to replace product on store shelves. Quarantine measures are 
forcing consumers to stock up on food staples, such as dry pasta, while loaves 
of bread hit the freezer. The buying would lead one to believe demand for wheat 
could surprise to the upside this marketing year in the United States and 
abroad. If history is any guide, the answer is not quite so clear, which is 
just the way wheat traders like it.

   The USDA's latest estimates for global wheat use in 2019-20 were released in 
early March, and peg food, seed and industrial use (FSI) at 604.206 million 
metric tons (mmt) or 22.198 billion bushels (bb). This is an all-time record 
for FSI use and would be up 1.64% from a year ago. The five-year average for 
FSI use is 1.24%, which coincidently, is almost the exact world population 
growth of 1.2%. The 10-year average for FSI use is 1.49%. Regardless of how far 
back one looks, FSI use tends to average out near global population growth, a 
reasonable conclusion to draw. However, we aren't interested in averages, 
considering the coronavirus is producing an environment that is anything but 
average. A much more pertinent comparison would be the 2010-11 Arab Spring or 
the 2008-09 financial crisis -- two events that saw countries scrambling for 
food staples around the globe. From a global perspective, 2010-11 saw global 
FSI growth of 1.71% while 2011-12 produced growth of 0.89% for an average of 
1.3%. The financial crisis saw FSI use of 0.69% in 2008-09 and 2.90% in 2009-10 
for an average growth of 1.79%.

   Global trends can often mask more interesting short-term gyrations, making a 
look at key stakeholders in the global wheat market worthwhile. For this 
portion of our investigation, we pulled import data for the five largest wheat 
importers in the world, but also looked at other major importers in the Middle 
East as well as the energy-rich nation of Venezuela. One major theme 
oil-producing nations outside of Russia and the United States have in common is 
they import copious amounts of wheat. Looking back at our two preferred time 
periods of 2008-09, 2009-10 and 2010-11, 2011-12, we see some very interesting 
data points. During the financial crisis, Iran and Saudi Arabia saw massive 
increases in wheat imports, jumping 3,300% and 1,600%, respectively, from 
2007-08 to 2008-09. Prior to the financial crisis, Saudi Arabia was not a major 
wheat importer, but it was also around this time that they made the decision to 
stop producing wheat domestically. The massive percentage jump owes more to the 
decision to stop raising the crop than panic buying related to inflation. 
Still, solid jumps in imports were witnessed by other major importers with 
2008-09 growth of 28% for Egypt, 41% for the Philippines, 60% for Turkey and 
27% for Jordan. During the Arab Spring, we also saw a sizable jump in imports 
with Egypt up 9.9%, Iran up 33%, Turkey up 9.7% and Saudi Arabia up 67%. While 
not directly involved with the Arab Spring, other major wheat importers saw a 
sizable increase in wheat imports as few countries wanted to be left with an 
empty cupboard while others panic bought. In 2011-12, Brazilian imports rose 
9.64%, the Philippines were up 24.7% and Venezuela rose 14.7%.

   The United States is front and center on the coronavirus battle and has seen 
some of the most noticeable panic buying of consumer staples. FSI consumption 
in the United States is pegged at 1.014 bb in 2019-20, which is almost exactly 
the five and 10-year average. The Arab Spring obviously didn't have the same 
effect domestically in the United States as it did in many Middle East 
countries, and there was no corresponding change to FSI use. Similarly, during 
the financial crisis, little to no change was seen in FSI use. Despite food and 
diet fads, food demand for wheat has changed little over the last 10 to 20 
years. Exports, however, did see big swings around the two events in question. 
In 2008-09, exports fell to 1.015 bb from 1.262 bb the year before and sank 
lower still to 879 million bushels (mb) in 2009-10. However, exports rebounded 
sharply to 1.291 bb in 2010-11 and 1.051 bb in 2011-12.

   Pictures of empty store shelves around the United States make for good 
headlines, but long term, little change is expected for food use either in this 
marketing year or next. When a surge in buying takes place domestically, 
millers and bakers usually switch to lower end wheat and flour that can produce 
utility bread products in a timely manner. The same should be true in the 
United States around the coronavirus, provided quarantine measures do not drag 
on longer than expected. 

   Global wheat demand is a much more complicated question, however, as history 
has shown. During times of panic, major wheat importers have shown a 
willingness to increase purchases above and beyond traditional growth rates. We 
think the same will be true this time around, especially as easy monetary 
policy is employed around the globe, keeping inflationary pressures high. The 
United States has become known as the "supplier of last resort" in the wheat 
market, able to step in when other supplies have been exhausted. The U.S. 
stepping in to play that role this spring and summer could be a big component 
of wheat continuing its rally.

   Tregg Cronin can be reached at

   Follow Tregg Cronin on Twitter @5thWave_tcronin

Bread and Flour Demand Rises as Consumers Clear Grocery Store Shelves

   For the past few weeks, I have noticed a more prevalent absence of flour at 
big-box and organic food stores. I am amazed at how many U.S. consumers have 
now became bread makers, when that has been a lost art for years. Even the 
bread machine craze had died down, as consumers wanted the convenience of 
buying a loaf of bread without all the mess and time it takes to bake it.

   Speaking for myself, and likely other consumers, I normally buy flour mainly 
to bake cookies, maybe a pie or cake and very rarely to make bread. While I 
love the smell of fresh bread baking, I like the convenience of buying it from 
my grocer, where I also have a choice of different bread flavors. 

   I was chatting with a woman at my local organic store, and she pointed to 
the box of yeast packets next to the empty flour shelf. She smiled and said, 
"It appears some shoppers forgot the main ingredient. I wonder how many people 
buying up all the flour actually have ever made scratch bread."

   Another way to look at this is that many consumers are simply going back to 
basics in this time of crisis, and the milling industry is scrambling to give 
them a hand.

   Mike O'Dea, risk management consultant at INTL-FCStone, said one thing about 
the current strength in the winter wheat market is still this simple fact: 
"People are buying bread and flour products due to the lockdowns and eating at 

   O'Dea noted that hard red winter and soft red winter wheat are seeing a jump 
in spot demand. Hard red spring wheat, other than for blending or for pizza, is 
lagging behind. This fresh demand has caused the cash price to rise since the 
beginning of this month. As of March 25, the DTN National Hard Red Winter Wheat 
Index has gone up 45 cents since March 2, the DTN National Soft Red Winter 
Wheat Index has gone up 28 cents and the DTN National Spring Wheat Index has 
gone up 22 cents.

   "Bread is a product that does not have a long shelf life, and the millers 
and bakers are running full time to meet that demand, as it is likely everyone 
will be eating sandwiches for the next few weeks," O'Dea said. "Talking to one 
of my flour mills, a baker they supply was making 14 kinds of bread a month 
ago, and now they are making three. Cheap pan bread and buns/rolls are what the 
market is looking for and also crackers."

   If you are wondering what pan bread is, I can tell you that when I started 
trading wheat to flour mills earlier in my career, I understood it to be a 
basic bread of flour, yeast, water and salt. I say that because I was told by 
one of my milling customers to buy the book "Bakers' Bread" by Paul Richards. 
The customer told me it would enlighten me to the world of flour and every kind 
of bread there was and help me understand what he did with the wheat I sold 
him. That book is where I was introduced to the meaning of pan bread. 

   Another interesting fact about pan bread, according to Richards, is that 
"Pan-baked breads lack the flavor of hearth-baked breads, and that is why the 
addition of lard and sugar was resorted to to give it flavor." I no longer have 
my ragged hard copy of the book, but a copy of it is safely tucked away on my 


   North American Millers' Association (NAMA), which represents millers of 
wheat, corn, oats and rye in the U.S. and Canada, said in a news release that 
it is actively monitoring the growing spread of the coronavirus, both 
internationally and domestically, and the impacts it will have on consumers and 
the food supply industry.

   "We want you to know that our nation's food supply and supply chain, 
including the flour milling industry, is very strong and grain-millers will 
continue to work to supply our retail customers and consumers," NAMA stated in 
its news release. "The NAMA members, along with other food companies, and in 
collaboration with the White House Coronavirus Task Force, are working to 
ensure a consistent and reliable flow of safe, nutritious and affordable food, 
such as flour, to food manufacturers and retail locations throughout the 

   James McCarthy, NAMA president and CEO said: "Flour and other grain-based 
foods are staples and are essential, nutritious parts of the American diet, and 
millers are taking a comprehensive approach to ensure the consistent delivery 
of safe, nutritious and affordable flour and flour-based food products to 
consumers in the U.S. and throughout North America. The milling industry has 
faced emergencies and natural disasters before, and the milling industry will 
continue serving our communities each and every day."

   NAMA made it clear that, even during this pandemic, the U.S. food system 
continues to adhere to the highest food safety and regulatory standards, which 
include high levels of sanitation, food safety testing and monitoring in food 
processing and handling environments. 

   "According to multiple public health agencies around the world, including 
the CDC, FDA, WHO and EFSA, coronaviruses are primarily spread from 
person-to-person, NOT via food," NAMA noted in the news release. "NAMA 
continues to work closely with food safety experts, public health officials, 
the White House Coronavirus Task Force and the U.S. Food and Drug 
Administration (FDA) to ensure the food production system remains safe and 

   "The health and safety of our member company employees is also a top 
priority," said NAMA. "Because of the nature of duties performed, most milling 
production workers do not work in continuous close proximity to one another. 
The milling industry is following CDC government guidance and taking additional 
steps to maximize the health and safety of our employees, including, employing 
social distancing procedures where applicable, providing additional health 
screening of employees, using additional safety gear and products, including 
masks, respirators and sanitizers, and increasing in the frequency of cleaning, 
deep cleaning and the use of anti-viral cleansers."

   Like me, I am sure you are grateful for the entire food industry keeping our 
food safe and our grocery store shelves stocked in this time of crisis. In my 
opinion, that is one thing that can help ease the panic so many people may be 
feeling right now.

   Mary Kennedy can be reached at 

   Follow her on Twitter @MaryCKenn

As Coronavirus Related Closures Continue, 2020 UMR Navigation Season Opens

   Hope springs eternal. As the coronavirus has taken over our lives, there are 
still many signs of hope along the way that attempt to bring us back to normal. 
Two obvious signs are the sunrise and sunset that happen every single day no 
matter what is going on around us, and remind all of us that life goes on. 

   On March 19, the first day of spring, there was a very welcome sign of hope 
in St. Paul, Minnesota, on the Mississippi River. St. Paul is where grain 
shipping starts its path south through the 29 U.S. Lock and Dam system then 
heads through St. Louis, Missouri, and on to River Delta near New Orleans and 
into the Gulf of Mexico.

   With open arms, MV Miss Doris was welcomed as the first tow to reach here to 
start the 2020 navigation season. It made its trek through Lake Pepin on March 
18, the last major barrier for vessels reaching the head of the navigation 
channel in St. Paul, Minnesota. Located between the Minnesota cities of Red 
Wing and Wabasha, Lake Pepin is the last part of the river to break up, because 
the river is wider and subsequently the current is slower there than it is at 
other reaches of the river, notes the U.S. Army Corps of Engineers (USACE) 
website. Once a tow can make it through Lake Pepin, it can make it all the way 
to St. Paul.

   The average date for the first tow to reach St. Paul is around March 18, but 
historic flooding and ensuing lock closures downriver kept the start of the 
2019 navigation season in the Upper Mississippi River (UMR) in limbo. The first 
tow didn't make it to St. Paul, Minnesota, until April 24, 2019, when MV Aaron 
F. Barrett, pushing 12 barges, finally locked through Lock and Dam 2 near 
Hastings on that date. After MV Barrett arrived, St. Paul would not see another 
tow for more than three weeks because of ongoing flooding closing locks on and 
off in the Rock Island District, stopping any vessels from coming upriver.

   While flooding in the northern UMR has not been a major issue yet, recent 
rains in the Midsouth that moved further north into the Upper Midwest over the 
past week gave rise to the water levels on middle UMR, noted Tom Russell, 
Russell Marine Group on March 22, "the St Louis Harbor at Mile 175 on the UMR 
is near flood stage and will exceed flood stage over the next few days. Tow 
sizes have been reduced and barge traffic limited to daylight only."

   The Lower Mississippi River (LMR) from Cairo to New Orleans has been 
battling high water for nearly three months. "This has been an ongoing pattern 
since December 2019 that has kept the LMR from Cairo to New Orleans in high 
water stage. Barge traffic on the Lower Miss is moving with safety zones that 
reduce the size of tows and some daylight only transit areas in effect," said 

   DTN Senior Ag Meteorologist Bryce Anderson noted that the DTN Ag weather 
forecast keeps periods of rain in store across the Midwest during the next 
week. "Fieldwork disruption and some flooding is likely. Northern areas have a 
high prospect of flooding during the coming spring after record precipitation 
during 2019 and periods of wet weather through the winter of 2019-20. The Delta 
has additional moderate-to-heavy rainfall indicated during the next five days. 
Wet conditions have caused significant disruption in fieldwork. Flooding is a 
major threat due to already-saturated soils ahead of the rain."

   I paid a visit to the Mississippi River in downtown St. Paul over the 
weekend and there were a few paths along the river that were closed from slight 
flooding the past few weeks. The river is expected to rise to just under 10 
feet by the end of the month. While it looks promising for now in St. Paul, 
heading downriver there are areas that may have or continue to have some 
flooding issues. 

   We can only hope we do not see the severe flooding we experienced across the 
entire Mississippi River System in 2019 that decimated farmland, river towns 
and stressed the infrastructure of our Locks and Dams and levees. So far, 2020 
has not started out the same way 2019 did as far as snowmelt and severe 
weather, so there is still the hope that while we could see flooding from 
spring rains, it may be mild compared to 2019.

   Here is a link to the NOAA March 19 spring flood update:

   Here is a link to the spring flood outlook for the St. Louis Service Area 
from the weather forecast office St. Louis, Missouri:

   Mary Kennedy can be reached at

   Follow her on Twitter @MaryCKenn

DTN Weekly Average DDG Price Surges

   OMAHA (DTN) -- The domestic distillers dried grains (DDG) weekly spot price 
from the 40 locations DTN contacted was up $14 on average, at $163, for the 
week ended March 19. 

   Merchandisers noted that, throughout the Midwest, including California, DDG 
prices have moved up $10 to as high as up $25 this week at plants that are 
still showing offers. Prices have moved sharply higher as supplies are tight 
and some plants currently have no offers for spot DDG. Ethanol plants are 
slowing down due to cheap gasoline and lower cash ethanol prices or for spring 

   Cash corn is in the process of retreating because of weaker basis this week 
as ethanol plants have widened their bids as much as 30 cents recently or, in 
some cases, pulled bids altogether for the nearby. While cheaper corn is 
supportive to plants, sharply lower gasoline prices, and in turn very low cash 
ethanol values, have been rough on margins.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended March 19 was 132.09%. The value of DDG relative to 
soybean meal was 51.78%. The cost per unit of protein for DDG was $6.04, 
compared to the cost per unit of protein for soybean meal at $6.63. As DDG 
prices rise and supplies tighten further, DDG could price itself out of feed 
rations temporarily and cheaper feed corn could see some fresh demand.

   In its weekly DDGS export update, the U.S. Grains Council noted, "DDGS 
merchandisers report that prices are rallying on expected supply tightening 
heading into Q2. Some in the industry expect the price-supportive impacts to 
continue into Q3 and Q4 of this year. Spot DDGS prices are up $20 per metric 
ton (mt) this week, if offers can be obtained, for Barge CIF NOLA values while 
indications for April FOB Gulf DDGS are up $15/mt. U.S. rail rates are 
$15-20/mt higher as well, depending on the shipment period. Prices for 40-foot 
containers to Southeast Asia are up $20/mt for April shipment and $15/mt higher 
for May." 

   Note: All prices listed below can change at any time and are subject to 
confirmation from seller.

COMPANY       STATE                         3/19/2020      3/12/2020
Bartlett and Company, Kansas City, MO (816-753-6300)
              Missouri               Dry       $175          $165        $10
                                     Wet       $88            $83         $5
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
              Missouri               Dry       $185          $160        $25
                                     Wet       $95            $83        $12
CHS, Minneapolis, MN (800-769-1066)
              Illinois               Dry        $0            $0          $0
              Indiana                Dry        $0            $0          $0
              Iowa                   Dry        $0            $0          $0
              Michigan               Dry        $0            $0          $0
              Minnesota              Dry        $0            $0          $0
              North Dakota           Dry        $0            $0          $0
              New York               Dry        $0            $0          $0
              South Dakota           Dry        $0            $0          $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
              Kansas                 Dry       $160          $148        $12
POET Nutrition, Sioux Falls, SD (888-327-8799)
LH MARCH      Indiana                Dry       $170          $155        $15
LH MARCH      Iowa                   Dry       $160          $145        $15
LH MARCH      Michigan               Dry       $160          $150        $10
LH MARCH      Minnesota              Dry       $160          $141        $19
LH MARCH      Missouri               Dry       $170          $158        $12
LH MARCH      Ohio                   Dry       $170          $160        $10
LH MARCH      South Dakota           Dry       $160          $148        $12
United BioEnergy, Wichita, KS (316-616-3521)
              Kansas                 Dry       $155          $145        $10
                                     Wet       $60            $50        $10
              Illinois MARCH         Dry        $0            $0          $0
              Nebraska               Dry       $155          $145        $10
                                     Wet       $55            $45        $10
U.S. Commodities, Minneapolis, MN (888-293-1640)
              Illinois               Dry        $0            $0          $0
              Indiana                Dry        $0            $0          $0
              Iowa                   Dry        $0            $0          $0
              Michigan               Dry        $0            $0          $0
              Minnesota              Dry        $0            $0          $0
              Nebraska               Dry        $0            $0          $0
              New York               Dry        $0            $0          $0
              North Dakota           Dry        $0            $0          $0
              Ohio                   Dry        $0            $0          $0
              South Dakota           Dry        $0            $0          $0
              Wisconsin              Dry        $0            $0          $0
Valero Energy Corp, San Antonio Texas
              Indiana                Dry       $175          $155        $20
              Iowa                   Dry       $145          $140         $5
              Minnesota              Dry       $160          $140        $20
              Nebraska               Dry       $135          $135         $0
              Ohio                   Dry       $180          $160        $20
              South Dakota           Dry       $150          $140        $10
              California             Dry       $228          $216        $12
Western Milling, Goshen, California (559-302-1074)
              California             Dry       $241          $228        $13
*Prices listed per ton.
              Weekly Average                   $163          $149        $14
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      3/19/2020   $3.4550      $123.39
                             Soybean Meal      3/19/2020   $314.80
            DDG Weekly Average Spot Price        $163.00
                                  DDG Value Relative to:   3/19        3/12
                                                    Corn   132.09%      112.83%
                                            Soybean Meal    51.78%       49.90%
                               Cost Per Unit of Protein:
                                                     DDG     $6.04        $5.52
                                            Soybean Meal     $6.63        $6.29
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 

   Follow her on Twitter @MaryCKenn

Trucking Hours of Service Relief Declared During National Emergency

   When many consumers pay a visit to their local grocery stores, they will 
likely be staring at aisles of empty shelves. In some areas, it has gone from 
empty aisles of toilet paper, hand sanitizer, water and cleaning supplies to 
now empty shelves at some stores of eggs, meat, pasta, rice, flour, butter, 
milk, and you can expect that list will continue to grow. Many are afraid that 
if the virus overwhelms the U.S., there may be a lack of supplies at their 
local grocery store. Now, with the addition of closed schools, school-aged 
children will be home all day, adding more to the grocery list for some parents.

   As of right now, there is no reported shortage of food items and other 
staples, and stores continue to restock. Many chain and warehouse grocery 
stores continue to get deliveries, but as fast as they stock shelves, consumers 
clear them off. There are now limits in many stores on things like toilet 
paper, facial tissue, hand sanitizer and cold relief items, just to name a few. 
These limits were put in place in an effort to stop the hoarding that has been 
taking place. 

   On March 13, the U.S. Department of Transportation's Federal Motor Carrier 
Safety Administration (FMCSA) issued a national emergency declaration to 
provide hours-of-service regulatory relief to commercial vehicle drivers 
transporting emergency relief in response to the nationwide coronavirus 
outbreak. "This declaration is the first time FMCSA has issued nation-wide 
relief and follows President Trump issuing of a national emergency declaration 
in response to the virus," according to the FMCSA website.

   "Because of the decisive leadership of President Trump and Secretary Chao, 
this declaration will help America's commercial drivers get these critical 
goods to impacted areas faster and more efficiently. FMCSA is continuing to 
closely monitor the coronavirus outbreak and stands ready to use its authority 
to protect the health and safety of the American people," said FMCSA Acting 
Administrator Jim Mullen. 

   The FMCSA website notes that the declaration provides for regulatory relief 
for commercial motor vehicle operations providing direct assistance supporting 
emergency relief efforts intended to meet immediate needs for:

   -- Medical supplies and equipment related to the testing, diagnosis and 
treatment of COVID-19.

   -- Supplies and equipment, including masks, gloves, hand sanitizer, soap and 
disinfectants, necessary for healthcare worker, patient and community safety, 
sanitation, and prevention of COVID-19 spread in communities.

   -- Food for emergency restocking of stores.

   -- Equipment, supplies and persons necessary for establishment and 
management of temporary housing and quarantine facilities related to COVID-19.

   -- Persons designated by Federal, State or local authorities for transport 
for medical, isolation or quarantine purposes.

   -- Personnel to provide medical or other emergency services.

   FMCSA made it clear that, "To ensure continued safety on the nation's 
roadways, the emergency declaration stipulates that once a driver has completed 
his or her delivery, the driver must receive a minimum of 10 hours off duty if 
transporting property and eight hours if transporting passengers."

   One thing facing U.S. citizens, besides, of course, concern over the spread 
of the virus, is what will happen tomorrow or the next day and the fear of the 
unknown can be very powerful. The cancellations and/or postponements of 
professional sports, college sports, concerts, airline travel plans, large 
group gatherings, schools and much more, have added to the chaos caused by the 
coronavirus. The emergency declaration of the FMCSA is one important step that 
could hopefully ease some of the anxiety felt by so many people, myself 

   Here is a link to FMCSA national emergency declaration:

   Mary Kennedy can be reached at

   Follow her on Twitter @MaryCKenn


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