Market Matters Blog

OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the 39 locations where DTN collected bids was $148 for the week ended Feb. 22, unchanged on average versus a week ago.

Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Feb. 22 was at 112.99%, and the value of DDG relative to soybean meal was at 39.26%. The cost per unit of protein for DDG was $5.48, compared to the cost per unit of protein for soybean meal at $7.93.

Merchandisers noted that domestic prices were mixed, but overall remain firm, especially given the high prices seen for soymeal. On a per unit of protein value, DDG is still cheaper than soymeal.

As the weather warms up, we may see a seasonal slowdown in demand, but for now, the market remains steady. The Asian market was quiet last week during the Chinese New Year and Tet holiday in Vietnam, but buyers are slowly returning.

The U.S. Grains Council (USGC) said in its weekly price update that merchandisers reported increased interest this week from Asian markets, including Indonesia and Vietnam. Prices for 40-foot containers to Indonesia (Jakarta) and Vietnam (HCMC) are up modestly this week from last, and on average, DDGS destined for Southeast Asia increased $2 per metric ton (mt) this week.

Barge CIF NOLA (New Orleans, Louisiana) prices are $8/mt higher this week, while FOB (free on board -- the buyer pays for transportation of the goods) Gulf DDGS values are also up $7/mt. High water has resulted in reduced tow sizes north- and south-bound on the Lower Mississippi River to the Gulf, with expectations this will continue for the foreseeable future. Baton Rouge is not expected to crest until the middle of March around 40 feet. New Orleans is not expected to crest until the second half of March at around 15 feet.

The conditions on the Ohio and Illinois rivers are horrible, as flooding has shut down all barge movements. The American Commercial Barge Line noted in its Thursday update that Dresden Lock (IR 271), Marseilles Lock (IR 245), and Starved Rock Lock (IR 231) are all currently closed and are not expected to resume operations through this area until at least March 2. In response, the CBOT declared force majeure due to load-out impossibility at a majority of corn regular shipping stations on the Illinois River because of high water levels and/or flooding.

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

Follow her on Twitter @MaryCKenn

(SK/AG)

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