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Market Matters Blog           08/20 10:01
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
US Infrastructure: Still in the Back of the Funding Line
DDG Prices Move Higher 
US Surface Transportation Board Still Waiting for Three New Members
2018 Spring Wheat Tour Preview: What Will Scouts Find?
DDG Prices Weaker
Positive Train Control: Are All US Railroads Ready for the 2018 Deadline?

******************************************************************************
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 Sherman 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

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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

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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

******************************************************************************
US Infrastructure: Still in the Back of the Funding Line

   On Aug. 1, 2007, at 6:05 pm CDT during rush hour in downtown Minneapolis, 
the I-35W bridge collapsed, sending cars, construction workers and trucks in to 
the Mississippi River below. A school bus carrying 63 children was also on the 
bridge, sitting precariously on a portion of the bridge that did not fall into 
the river. All the children were rescued but in the end, 13 people were killed 
and 145 were wounded. 

   It was a miracle that the death toll was as low as it was, given that within 
the hour before the collapse, traffic was heavier. This was partially due to 
baseball fans driving downtown for a Minnesota Twins game that evening. Also, 
at the time of the collapse, four of the eight lanes were closed for 
resurfacing, which had many cars finding different routes in and out of 
downtown.

   On Jan. 15, 2008, the National Transportation Safety Board (NTSB) announced 
it had determined a design flaw as the likely cause of the collapse, noting 
that a "too-thin gusset plate" ripped along a line of rivets, and additional 
weight on the bridge at the time contributed to the catastrophic failure.

   The I-35W bridge collapse sparked immediate calls within the state of  
Minnesota, as well as across the country, that the federal government must step 
up and invest funds in repairing and replacing the nation's aging and crumbling 
infrastructure, including bridges. 

   The collapse of the I-35W bridge was not due to deferred maintenance or 
neglect noted the NTSB. In fact, at the time of the collapse, construction had 
been taking place in the weeks prior, which included joint work and lighting 
replacement, and concrete and guardrails. 

   According to Wikipedia, there were 575,000 pounds of construction supplies 
and equipment on the bridge. The NTSB said that because of that design flaw, 
the additional weight on the bridge at the time contributed to the catastrophic 
failure.

   Since the collapse, at least 120 of the 172 bridges identified as 
structurally deficient or fracture critical in Minnesota have been repaired or 
replaced. According to National Public Radio (NPR), Minnesota also stepped up 
and improved bridge inspections, and now sometimes uses drones to take photos 
and video of spots on bridges that are difficult for human inspectors to reach. 
The state now gets outside independent peer reviews of bridge design plans and 
has revamped its bridge maintenance worker-training program.

   US ROADS AND BRIDGES NEED DEDICATED FUNDING

   The Ag industry relies on U.S. roads and bridges to haul commodities to 
market. Those roads and bridges must be maintained in order for farmers and 
shippers to have a safe path to ship their commodities. If the federal 
government does not come up with a plan to fix the aging roads and bridges, 
everyone would suffer consequences. The American Society of Civil Engineers 
(ASCE) report card gave U.S. roads a D on their 2017 infrastructure report 
card. 

   Here is a link to the report card, which also breaks out grades for each 
state in all infrastructure categories: 
https://www.infrastructurereportcard.org/ 

   At the National Grain and Feed Ag Transportation Summit in Washington, D.C., 
on July 25, two state Department of Transportation (DOT) directors spoke about 
the lack of funding for the U.S. roadways and said that there is a great need 
for dedicated and sustainable funding.

   The panel, consisting of Kirk Steudle, Michigan DOT and Tom Sorel, North 
Dakota DOT, discussed the fact that there is not enough money to maintain the 
interstate system. They suggested that each state raise their gas tax or 
registration fees or add tollways.

   The American Trucking Association (ATA) has said that it supports a fuel tax 
as a way to increase funding. On their website, the ATA notes, "Because it is a 
user fee, the fuel tax is the most conservative, cost-effective and viable 
solution to making that vision a reality. Ninety-nine cents of every dollar 
goes directly to road and bridge maintenance, and it doesn't add a penny to the 
deficit."

   Dr. David Ellis, Senior Research Scientist at the Texas A&M Transportation 
Institute with the Infrastructure Investment Analysis Program also spoke at the 
Summit. He said that as far as U.S infrastructure goes, there are more projects 
than there is money to fund them.

   "We had the best infrastructure in the world at one time," said Ellis. 
Population growth outweighed the ability of many states to keep up with new 
roads and bridges and repairs. "We need to be smarter and increase funding and 
change the way we get that funding," he added. He said that state and local 
governments would have to become responsible by adding fees and also by finding 
private sector investors. 

   "We must tell the story to the consumer in a way they understand the 
monetary cost versus the cost of doing nothing," added Ellis. "Do the 
maintenance or face the consequences."

   In their 2017 infrastructure report card, the ASCE said that at end of 2016, 
the U.S. had 614,387 bridges (four in 10) that are 50 years or older. The study 
noted that one in 11 (9.1%) of bridges were designated structurally deficient. 
The study graded the overall condition of the U.S. bridges a C+. As for cost of 
repairing and or replacing, ASCE reported in the study that the most recent 
estimate puts the nation's backlog of bridge rehabilitation needs at $123 
billion.

   Washington, D.C. based American Road & Transportation Builders Association 
(ARTBA) estimates it would take more than three decades to repair or replace 
the more than 55,000 bridges that are in most desperate need of it.

   Those of us in Minnesota who saw the aftermath of the collapse with our own 
eyes will never forget the catastrophe that took place the evening of Aug. 1, 
2007, forever changing the lives of the 145 survivors and the families of the 
13 people who died. 

   Sadly, it appears the federal government has forgotten, as U.S. 
infrastructure still waits in the back of the long line where federal funds are 
allocated.

   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 pushed higher in the past two weeks at $134 per ton for 
the week ended August. That's up $13 per ton versus the last update on July 19. 
Values have significantly improved with the strength in corn prices and a 
pickup in export interest for U.S. DDGS.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended Aug. 2 was at 102.30%, and the value of DDG relative 
to soybean meal was at 40.26%. The cost per unit of protein for DDG was $4.96, 
compared to the cost per unit of protein for soybean meal at $7.01. The DDG 
ratio to cash corn value remains pretty much in line with its two-year average 
and DDG remains the better value over soymeal. 

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
prices were up across the board this week, jumping to $224 per metric ton (mt) 
for FOB U.S. Gulf August shipment. Containers to Southeast Asia saw 
double-digit increases, with merchandisers reporting brisk market activity and 
sales to Vietnam and Thailand. According to USDA FAS, Vietnam's animal feed 
demand in 2018-19 will be up 3% to 30.9 million metric tons (mmt) due to 
expanding pork and aquaculture production. DDGS consumption will make the 
biggest jump in consumption, rising 45% to 1 mmt. Reportedly, ocean container 
capacity is filling up rapidly in response to the market's activity."


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                                8/2/2018       7/19/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $155           $135       $20
                              Modified           $75             $67       $8
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
          Missouri            Dry                $155           $140       $15
                              Wet                $80             $65       $15
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $156           $147       $9
          Indiana             Dry                $148           $138       $10
          Iowa                Dry                $135           $120       $15
          Michigan            Dry                $144           $130       $14
          Minnesota           Dry                $120           $110       $10
          North Dakota        Dry                $120           $110       $10
          New York            Dry                $142           $130       $12
          South Dakota        Dry                $120           $110       $10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $135           $118       $17
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $145           $135       $10
          Iowa                Dry                $125           $110       $15
          Michigan            Dry                $140           $135       $5
          Minnesota           Dry                $125           $105       $20
          Missouri            Dry                $150           $140       $10
          Ohio                Dry                $145           $135       $10
          South Dakota        Dry                $115           $100       $15
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $121           $118       $3
                              Wet                $35             $35       $0
          Illinois            Dry                $158           $150       $8
          Nebraska            Dry                $121           $118       $3
                              Wet                $35             $35       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $145           $135       $10
          Indiana             Dry                $140           $130       $10
          Iowa                Dry                $125           $115       $10
          Michigan            Dry                $140           $130       $10
          Minnesota           Dry                $125           $110       $15
          Nebraska            Dry                $125           $105       $20
          New York            Dry                $150           $135       $15
          North Dakota        Dry                $120           $110       $10
          Ohio                Dry                $145           $130       $15
          South Dakota        Dry                $120           $110       $10
          Wisconsin           Dry                $140           $130       $10
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $140           $133       $7
          Iowa                Dry                $117            $95       $22
          Minnesota           Dry                $115           $100       $15
          Nebraska            Dry                $120            $90       $30
          Ohio                Dry                $145           $140       $5
          South Dakota        Dry                $115           $105       $10
          California                             $205           $184       $21
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $213           $199       $14
*Prices listed per ton.
          Weekly Average                         $134           $121       $13
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                                      8/2/2018       $3.6675   $130.98
Soybean Meal                              8/2/2018       $332.80
DDG Weekly Average Spot Price             $134.00
DDG Value Relative to:                                   8/2       7/19
Corn                                                     102.30%   101.51%
Soybean Meal                                             40.26%    36.59%
Cost Per Unit of Protein:
DDG                                                      $4.96     $4.48
Soybean Meal                                             $7.01     $6.92
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
US Surface Transportation Board Still Waiting for Three New Members

   For the first time since its creation, Congress passed the Surface 
Transportation Board (also known as STB or Board) Reauthorization Act of 2015 
that became law on Dec. 18, 2015. Among other things, the new act expanded the 
STB from three members to five. 

   Here is a link to the Surface Transportation Board Reauthorization Act of 
2015: https://www.congress.gov/bill/114th-congress/senate-bill/808/text/pl 

   When President Trump was elected, he became responsible for nominating three 
new STB members, which would be subject to Senate confirmation. The political 
party in power can control the majority of the STB seats; meaning Republicans 
now have the opportunity to fill two of the three vacancies. Currently, the STB 
still consists of two members: Chairman Ann Begeman, a Republican, and Vice 
Chairman Deb Miller, a Democrat.

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

   Hon. Ann Begeman, STB Chairman, told participants on July 25 at the NGFA Ag 
Transportation Summit in Washington, D.C., that she is "hopeful" the three 
nominees are confirmed very soon. She said that rulemaking issues were on hold 
until the new members are confirmed, because they "need to be decided by all 
five members, not just two."

   Begeman is referring to these two issues: The rail rate case process and 
reciprocal switching. The rail rate case process has been under discussion 
since late 2013. Begeman noted what most shippers are painfully aware of this, 
and that is the current methodology used to challenge freight rail rates is 
unreasonable, time consuming and extremely costly for a shipper to file. 
Begeman said that, "rate reform is my top priority."

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

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

   I asked Begeman if her hands were tied until the Board officially had five 
members, or were she and Miller able to rule on day-to-day issues, especially 
rail service issues.

   She said that other than the major rulemaking issues, the current Board is 
on top of service issues and shipper-related complaints. On March 16, 2018, the 
STB responded to industry concerns of poor rail service by sending a letter to 
all U.S. Class I railroads, requesting that they provide their service outlook 
plans in the near term and for the remainder of 2018, "due to increased 
concerns over deteriorating service." The STB asked for information about each 
railroad's network, including locomotive availability, employee resources, 
local service performance, service demand, communication strategies and 
capacity constraints. 

   Here is a link to the letters received by the STB from the railroads: 
https://www.stb.gov/stb/elibrary/NDP_Correspondence.html 

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

   Here is a link to more information, including phone numbers and other ways 
for shippers to submit a complaint: 
https://www.stb.gov/stb/rail/consumer_asst.html 

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

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
2018 Spring Wheat Tour Preview: What Will Scouts Find?

   The 2018 Wheat Quality Council spring wheat and durum tour will begin and 
end in Fargo, North Dakota, with scouts gathering Monday, July 23, in the 
evening and then heading out to check fields July 24 through the morning of 
July 26. Similar to last year, day one will cover the southern half of North 
Dakota, southwestern Minnesota and northeast/north-central South Dakota. Day 
two will cover northwest and north-central North Dakota, with day three 
covering north-central/northeast North Dakota and northwest/west-central 
Minnesota. 

   "Expectations for this year are, of course, for better conditions in the 
west as opposed to last year where drought has not been an issue this year," 
said Dave Green, executive vice president of the Wheat Quality Council. 

   Green is referring to the severe drought that gripped the western part of 
North Dakota and north-central South Dakota last year where conditions were 
very poor. In fact, last year at this same time, the USDA weekly Crop Progress 
report showed spring wheat conditions in North Dakota as 40% very poor to poor, 
28% fair and 28% good. South Dakota conditions showed 74% of the crop in very 
poor to poor condition, 18% fair and 7% good.

   As of July 15, the most current USDA weekly Crop Progress report showed that 
4% of the North Dakota spring wheat is in very poor to poor condition, 13% is 
fair and 72% is good. South Dakota showed 13% of their spring in very poor to 
poor condition, 36% fair and 47% good.

   "South Dakota and North Dakota Wheat Commissions have been reporting that 
their crop is in good shape so far this year," said Green. He told me that, as 
of July 19, he had 55 scouts signed up to participate. "This year, I am sending 
a higher percentage of cars to the southwest due to higher acreage there."

   I had a chance to speak with farmers and elevator managers in North and 
South Dakota the past week and heard mixed expectations for their spring wheat 
crop.

   Keith Brandt, general manager of Plains, Grain and Agronomy in Enderlin, 
North Dakota said, "This spring wheat crop isn't the crop we had the last two 
years. The heat and dryness in May hurt wheat on lighter soils. And, we didn't 
get the tillering that we should. The stands are uneven and there is going to 
be issues with scab too. I don't buy the USDA yield estimate of 48 bushels per 
acre (bpa) statewide. That would match the record." Enderlin, North Dakota, is 
located in Cass and Ransom counties and is southwest of Fargo. 

   An elevator manager in east-central North Dakota said that wheat is average 
to just below average to the east, south and north of him. "The 
Hope/Finley/Clifford areas are a little drier and were planted two weeks late 
and are a little below average for sure. All the wheat started out very nice, 
hit a dry spell and went backwards," he said. "It had enough moisture to go on, 
but headed short and thinner than normal. It got good rains so it should have 
filled nice." 

   He told me that some areas are turning and are about two weeks out, but 
other areas still need a month. "I will tell you that some fields by my 
elevator look better from the road. One field I walked in had short and 
thinner-than-normal plants, with small heads and a lack of kernels. This was a 
field where the farmer put in all the necessary inputs and normally yields 
above average, but this year it will be average at best."  

   Jeff Kittell, merchandiser at Border Ag and Energy in Russell, North Dakota, 
said, "The spring wheat in our area looks good at the present time as we have 
been receiving rain all summer. Concern now is for scab and vomitoxin as 
humidity and lots of dew-filled mornings are perfect conditions for disease. 
However, I am seeing a lot of fungicide spraying with hopes that it will keep 
disease at bay." Russell is located in the north-central part of the state in 
Bottineau County.

   One year ago, Allan Klain, Turtle Lake, North Dakota, had this to say: "We 
are in the dark red on the drought monitor here. My hay ground is burnt up and 
my spring wheat is thin stands and headed out and barely a foot tall." 

   This summer, he has better news to share. "Our spring wheat looks good and 
we are expecting good yields. The early seeded fields lost some yield potential 
due to a very dry May. We had some emergence issues due to dryness at planting. 
It has evened out, but harvest could be drawn out. There has been a fair amount 
of spraying for fusarium (scab)." Turtle Lake is in McLean County and is in the 
south-central part of the state, north of Bismarck. 

   Tim Luken, manager of Oahe Grain in Onida, South Dakota, said, "Spring wheat 
plants are short this year, and I am very surprised at this. We had moisture to 
start things off in good shape. The wrath of Mother Nature, I guess! Spring 
wheat is turning fast, and I am expecting we see some spring wheat cut by the 
end of the week." Last year, Onida was in the throes of a never-ending drought, 
and while two hailstorms moved through his area this summer, he was uncertain 
as to exactly how many spring wheat acres were lost along with winter wheat and 
corn. Onida is located in Sully County in north-central South Dakota.

   "Things are looking pretty good around here considering how late the crop 
went in," said Ryan Wagner, Wagner Farms, located near Roslyn, South Dakota. 
"I'm worried we pushed it a little too hard in June with all the heat, but 
rainfall has been more than adequate. Starting to hear a few reports of scab 
showing up, but not sure if that is just localized or widespread. It's been 
quite a while since we have had a bad scab year, so maybe we are just 
overreacting." Roslyn is located in Day County in northeastern South Dakota. 

   "Overall, I'm starting to question whether or not this crop is as great as 
the USDA conditions indicate it is," said Wagner. "Acres are huge obviously, 
but between the scab issue and the warm June, I'm just not convinced it's going 
to be a bumper crop. Early winter wheat taken off around here this week was 
disappointing, but everyone says the spring wheat looks better."

   Wagner said that, on his farm, it's going to be a tough year for spring 
wheat because they got "slammed" with some pretty significant hail on July 9 on 
about half of his acres. "The crop insurance adjuster is coming to assess the 
damage, but we probably won't learn too much because the type of insurance we 
have requires all claims get deferred until after harvest." 

   It will be interesting to see what the scouts find this year, especially 
given the uncertainty in some areas mentioned above. 

   "Every car gives a detailed report each evening on their findings compared 
to previous year's results in each spot inspected," said Green. The 2017 spring 
wheat tour ended with an average yield of 38.1 bpa versus the USDA 2017 
September Small Grains Report final U.S spring wheat yield at 41.0 bpa.  

   When I was on the hard red winter wheat tour this past spring, Green told us 
that the tour is the industry's "first look" at the crop. "We know between now 
and harvest that yields can change, but the tour is a good starting point. It 
gives us the first snapshot of the 2018 crop." Scouts will be posting comments 
and pictures of scouted fields on Twitter using the hashtag #wheattour18. 

   And, as the saying goes, a picture is worth a thousand words.

   Here is link to information published by Ohio State University Extension on 
fusarium head blight, also referred to as scab: 
https://ohioline.osu.edu/factsheet/plpath-cer-06 

   Here is a link to information published by North Dakota Stata University on 
vomitoxin, also referred to as DON: 
https://www.ag.ndsu.edu/publications/crops/plant-disease-management-deoxynivalen
ol-don-in-small-grains-1 

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

   Follow her on Twitter @MaryCKenn

******************************************************************************
DDG Prices Weaker

   OMAHA (DTN) -- The distillers dried grains (DDG) spot prices from the 40 
locations DTN contacted were mixed, but on average were lower this week at $121 
per ton for the week ended July 19, down $1 versus one week ago. Values have 
improved from recent weeks in some areas, thanks in part to a slight 
improvement in cash corn prices and a pick-up in export interest for U.S. DDGS.

   Based on the average of prices collected by DTN, the value of DDG relative 
to corn for the week ended July 19 was at 96.46%, and the value of DDG relative 
to soybean meal was at 36.80%. The cost per unit of protein for DDG was $4.48, 
compared to the cost per unit of protein for soybean meal at $6.92. The DDG 
value to cash corn remains near the two-year average for this time frame. Even 
with soymeal values higher the past week and DDG prices lower, DDG is still a 
better value on a cost per unit of protein.

   In its weekly DDGS price update, the U.S. Grains Council (USGC) noted, "DDGS 
prices were mostly steady to down slightly this week. DDGS at the Gulf were 
unchanged from last week, while U.S. rail rates fell slightly. With prices 
stable, merchandisers are reporting buyer activity from Southeast Asian markets 
including Vietnam, Thailand, and the Philippines. Bangladeshi buyers are also 
reportedly active as container rates to that market fell to $267 per metric 
ton."

   Recently released U.S. Census Bureau data showed U.S. DDGS exports in May 
were up 38% from a year ago, with Turkey, Mexico, South Korea, Vietnam and 
Thailand the top destinations. Year-to-date reported export volumes are 
slightly up from the same period last year, noted USGC. 


ALL PRICES SUBJECT TO CONFIRMATION             CURRENT        PREVIOUS   CHANGE
COMPANY   STATE                               7/19/2018       7/12/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri            Dry                $135           $130       $5
                              Modified           $67             $65       $2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
          Missouri            Dry                $140           $140       $0
                              Wet                $65             $65       $0
CHS, Minneapolis, MN (800-769-1066)
          Illinois            Dry                $147           $145       $2
          Indiana             Dry                $138           $138       $0
          Iowa                Dry                $120           $120       $0
          Michigan            Dry                $130           $130       $0
          Minnesota           Dry                $110           $110       $0
          North Dakota        Dry                $110           $110       $0
          New York            Dry                $130           $140      -$10
          South Dakota        Dry                $110           $110       $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas              Dry                $118           $120       -$2
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana             Dry                $135           $140       -$5
          Iowa                Dry                $110           $105       $5
          Michigan            Dry                $135           $140       -$5
          Minnesota           Dry                $105           $105       $0
          Missouri            Dry                $140           $140       $0
          Ohio                Dry                $135           $140       -$5
          South Dakota        Dry                $100           $100       $0
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas              Dry                $118           $118       $0
                              Wet                $35             $35       $0
          Illinois            Dry                $150           $150       $0
          Nebraska            Dry                $118           $118       $0
                              Wet                $35             $35       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois            Dry                $135           $135       $0
          Indiana             Dry                $130           $130       $0
          Iowa                Dry                $115           $115       $0
          Michigan            Dry                $130           $125       $5
          Minnesota           Dry                $110           $115       -$5
          Nebraska            Dry                $105           $110       -$5
          New York            Dry                $135           $135       $0
          North Dakota        Dry                $110           $110       $0
          Ohio                Dry                $130           $130       $0
          South Dakota        Dry                $110           $110       $0
          Wisconsin           Dry                $130           $130       $0
Valero Energy Corp, San Antonio Texas     (210-345-3362)     (210-345-3362)
          Indiana             Dry                $133           $133       $0
          Iowa                Dry                $95             $95       $0
          Minnesota           Dry                $100           $100       $0
          Nebraska            Dry                $90             $90       $0
          Ohio                Dry                $140           $140       $0
          South Dakota        Dry                $105           $105       $0
          California                             $184           $184       $0
Western Milling, Goshen, California (559-302-1074)
          California          Dry                $199           $205       -$6
*Prices listed per ton.
          Weekly Average                         $121           $122       -$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      7/19/2018   $3.5125      $125.45
                             Soybean Meal      7/19/2018   $328.80
            DDG Weekly Average Spot Price        $121.00
                                  DDG Value Relative to:   7/19        6/28
                                                    Corn   101.51%      101.51%
                                            Soybean Meal    36.59%       36.59%
                               Cost Per Unit of Protein:
                                                     DDG     $4.48        $4.52
                                            Soybean Meal     $6.92        $7.02
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

******************************************************************************
Positive Train Control: Are All US Railroads Ready for the 2018 Deadline?

   In late 2015, Congress extended the deadline for positive train control 
implementation by at least three years to Dec. 31, 2018, with a possible 
extension to Dec. 31, 2020, if a railroad completed certain statutory 
requirements necessary to obtain an extension, according to the Federal 
Railroad Administration (FRA). The legislation, the Positive Train Control 
Enforcement and Implementation Act of 2015, required all railroads to submit a 
revised PTC Implementation Plan (PTCIP) by Jan. 27, 2016, outlining when and 
how the railroad would have a system fully installed and activated.

   The U.S. Department of Transportation (DOT) released a letter on Jan. 2, 
2018, from Secretary of Transportation Elaine L. Chao to all the nation's Class 
I railroads, intercity passenger railroads and state and local transit 
authorities, stressing the urgency and importance of safely implementing 
positive train control (PTC) systems in the upcoming year to meet the Dec. 31, 
2018, deadline, as mandated by Congress.

   "Advancing the implementation of PTC is among the most important rail safety 
initiatives on the Department's agenda," Secretary Chao said in the letter. 
"FRA leadership has been directed to work with your organization's leadership 
to help create an increased level of urgency to underscore the imperative of 
meeting existing expectations for rolling out this critical rail-safety 
technology." 

   U.S. Sen. John Thune, R-S.D., chairman of the Senate Committee on Commerce, 
Science and Transportation, convened a hearing titled, "Implementation of 
Positive Train Control" on March 1, 2018. "Railroad passengers expect railroads 
to follow safety laws and implement the necessary technology to do so, 
including PTC," said Thune. "After troubling reports that some commuter 
railroads are falling behind on implementation, this hearing will examine what 
needs to get done and what railroads need to do to meet their obligations." 

   Here is a link to the testimonies at the hearing: 
https://www.commerce.senate.gov/public/index.cfm/2018/3/implementation-of-positi
ve-train-control 

   BNSF Railway Company (BNSF) announced in December 2017 that it had fully 
installed PTC and was operating under PTC on all mandated subdivisions well 
ahead of the year-end deadline. However, in mid-June, they submitted a request 
to the DOT for a two-year extension of the PTC deadline, due to the FRA current 
interpretation of the law that full implementation status cannot be achieved 
until all non-BNSF trains and/or equipment operating on its PTC-equipped lines 
are also PTC compliant, according to a BNSF press release.

   "BNSF has succeeded in the adoption of this key safety technology. Even with 
this request for a deadline extension, BNSF's PTC network is installed and we 
are currently running, and will continue to run, more than a thousand trains 
daily with PTC as we continue to refine the system and resolve technological 
challenges," said Chris Matthews, BNSF assistant vice president, Network 
Control Systems.

   However, to be considered fully implemented requires that all other 
railroads operating across any of BNSF's PTC-equipped lines must be capable of 
operating with BNSF's PTC system, noted the press release. "This 
interoperability of PTC systems between Class I, commuter and short-line rail 
carriers remains a challenge," said BNSF. "While the BNSF has successfully 
demonstrated interoperability with several railroads that operate on its 
network, including commuter railroads and Amtrak, not all railroads that 
operate on BNSF will have completed their PTC installation by the end of 2018."

   Union Pacific (UP) has stated on their website that, at the end of 2018, PTC 
will be 100% installed on UP's required rail lines, and implemented on 75% of 
the required lines.

   "When we filed our revised implementation plan in 2016, the goal was full 
PTC implementation on all required lines by the end of 2018. However, as we 
implemented this complex suite of technologies across our network, the largest 
one in the U.S., unanticipated operational issues developed," UP stated on 
their website.

   "As permitted by Federal statute, UP intends to file with the FRA an 
alternative schedule for implementing PTC on the remaining segments as soon as 
practicable, but no later than the end of 2020. We will meet all criteria 
necessary for an alternative schedule, including full network installation and 
implementation on the majority of required lines, by the end of 2018.

   "UP remains committed to PTC. The alternative schedule provides flexibility 
to problem solve issues that arise, so that this critical safety system is 
implemented correctly. PTC will be installed and implemented for all passenger 
use on UP's required lines by the end of 2018."

   The Association of American Railroads (AAR) stated on their website that 
Class I railroads that meet the 2018 installation deadline can obtain an 
additional 24 months to test and ensure the system is fully interoperable. 

   "It is not enough to get PTC to operate across a single railroad's 
footprint; it must be interoperable. Interoperability means that the system 
works with any PTC-equipped locomotive running on any of the railroad tracks 
through the United States where PTC is required," noted AAR. "While some 
railroads will be fully implemented by the end of 2018, others will continue to 
test and will be fully interoperable no later than the 2020 deadline." 

   Here is a link to the background on Positive Train Control Enforcement and 
Implementation Act of 2015: 

   
https://www.transportation.gov/briefing-room/background-positive-train-control-e
nforcement-and-implementation-act-2015 

   Here is a link to an article posted by Association of American Railroads on 
Complexities and Challenges of PTC 

   https://www.aar.org/article/complexities-challenges-ptc/ 

   Here is a link to all U.S railroads quarterly reports on PTC implementation 
progress: 

   https://www.fra.dot.gov/Page/P0628 

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

   Follow her on Twitter @MaryCKenn

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