Ethanol Blog

Although prices of corn and dried distillers grains spiked early this week, the volatility was short-lived as prices seemed to have level out, resulting in only a slight price decrease in DDG prices at week's end.

The DTN weekly DDG spot price average fell just $1 per ton in the past week, from $231 per ton to $230. This marks the eighth consecutive week that DDG prices have fallen, reaching the lowest level since the end of June 2012. The average has fallen $40 per ton since the first week of February, with $35 in the past eight weeks.

Of the 29 Midwestern locations DTN collects prices from, nine locations said their prices had decreased since last week, while only five had prices increases. A total of 14 locations reported their prices remained the same since last week, and one location's prices were not available.

Merchandisers told DTN that the continuing drop in prices is still due largely to increased supplies of DDG, since ethanol margins have improved, spring maintenance shut-down season is nearing its end and plants are running full tilt.

Sluggish demand is also factoring in on the continuing DDG price decreases. One merchandiser also commented that there are currently a decreased number of cattle, especially in Nebraska and Kansas, which could also be a factor in decreased demand.

Late-season winter storms and cold, rainy weather are causing a lot of concern about planting delays, which could begin to push corn and DDG prices up if conditions continue.

The value of DDG relative to corn fell about 7% this week, to 92.33%. Last week was the first time the value fell below 100% since early December 2012. The value of DDG relative to soybean meal was 54.95%.

The cost per unit of protein for DDG this week was $9.20, compared to the cost per unit of protein for soybean meal at $8.81.

Cheryl Anderson can be reached at Cheryl.anderson@telventdtn.com.

(ES)

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