Market Matters Blog

The DTN average DDG spot price moved $5 lower from one week ago to $93 for the week ended Jan. 12. Price declines ranged from $2 to $20 per ton. Of the 39 locations from which DTN collects spot prices, 25 bids were lower, 5 bids were higher and the balance of the prices were unchanged.

On Jan. 10, China released a final ruling on U.S. distillers grains duties and tariffs following a year-long trade probe. Anti-dumping duties were set at a range from 42.2% to 53.7%, while anti-subsidy tariffs will be between 11.2% and 12%. The duties and tariffs apply to both distillers dried grains with and without solubles and will be in effect for five years starting Jan. 12, 2017. The preliminary penalties assessed in late September 2016 were an anti-dumping deposit of 33.8% and an anti-subsidy tariff of 10% to 10.7%. Merchandisers told DTN the market had expected the news, but some thought the final ruling was a bit harsh. A few noted prices have been helped a bit by good truck demand in the Midwest. However, Eastern Corn Belt locations with quality problems are trading $10-15 per below standard quality product. Remember, there is a vomitoxin issue in parts of the ECB and if tainted corn is put through the plant, it can affect the DDG allowable ranges for various animal feeds.

CIF NOLA (New Orleans, Louisiana) DDGS prices for the week ended Jan. 12 were 6 cents lower for January at $118. February/March prices were 2 to 4 cents lower at $112 to $128. Informa Economics reported that export data through November 2016 was down 9 percentage points compared to a year ago. "Exports to China were off by roughly two-thirds compared to the previous year, so some of the impact of tariffs has already influenced the market. The weakness in DDGS prices at container yards and the Gulf suggest that this is an opportunity to entice new export demand."

The value of DDG relative to corn for the week ended Jan. 12 was lower at 72.68% and the value of DDG relative to soybean meal was lower at 28.68%. The cost per unit of protein for DDG was lower at $3.72 compared to the cost per unit of protein for soybean meal which was higher at $6.83. The relative price of DDG to corn and meal futures is running below average and remains a good value for end users.

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

(AG/ES)

© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.