Market Matters Blog
Cold Weather, Tight Supplies Keeps DDG Prices Firm
OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from the 39 locations DTN collects bids from was $138 for the week ended Jan. 4, 4 cents higher than two weeks ago.
Based on the average of bids collected by DTN, the value of DDG relative to corn for the week ended Jan. 4 was at 110.08%, and the value of DDG relative to soybean meal was at 43.70%. The cost per unit of protein for DDG was $5.11, compared to the cost per unit of protein for soybean meal at $6.65.
Merchandisers noted that the market is higher in part due to the demand from the extreme cold blanketing much of the U.S. Also, because of the cold weather, the natural gas prices have spiked, causing plants to slow run times. Natural gas is what plants use to run their dryers and with weak margins, many plants are slowing down a little, and in turn, are not producing as much dry product that is needed to meet the demand right now.
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The U.S. Grains Council (USGC) said in its weekly price update that internationally, FOB Gulf prices are steady on holiday-reduced demand. "The average price for January shipment is $203/metric ton with February shipments $3/MT lower. Prices for March shipment are just under $200/MT as DDGS supplies should increase heading into the spring. Prices for 40-foot containers to Southeast Asia are $226.5/MT, $3 above the pre-holiday (Dec. 21, 2017) weekly average. Merchandisers are reporting prices to Vietnam are the strongest of Asian destinations, rising $6/MT from Dec. 21."
However, merchandisers told me that there are containers out east just sitting, unable to be shipped because of the snow and cold weather. One of the main issues is that the due to the temperatures being below freezing the past week in the southeast, containers cannot be fumigated because it is too cold. Vietnam requires temperatures (for this time of year) to be 50 to 59 degrees Fahrenheit for a minimum exposure period of five days.
| CURRENT | CURRENT | CHANGE | |||||||
| COMPANY | STATE | 1/4/2018 | 12/21/2017 | ||||||
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||||||
| Missouri | Dry | $165 | $150 | $15 | |||||
| Modified | $82 | $75 | $7 | ||||||
| CHS, Minneapolis, MN (800-769-1066) | |||||||||
| Illinois | Dry | $142 | $140 | $2 | |||||
| Indiana | Dry | $140 | $138 | $2 | |||||
| Iowa | Dry | $130 | $128 | $2 | |||||
| Michigan | Dry | $145 | $140 | $5 | |||||
| Minnesota | Dry | $130 | $130 | $0 | |||||
| North Dakota | Dry | $145 | $145 | $0 | |||||
| New York | Dry | $155 | $135 | $20 | |||||
| South Dakota | Dry | $137 | $137 | $0 | |||||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||||||
| Kansas | Dry | $150 | $145 | $5 | |||||
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||||||
| Indiana | Dry | $145 | $130 | $15 | |||||
| Iowa | Dry | $128 | $125 | $3 | |||||
| Michigan | Dry | $140 | $130 | $10 | |||||
| Minnesota | Dry | $128 | $125 | $3 | |||||
| Missouri | Dry | $142 | $140 | $2 | |||||
| Ohio | Dry | $145 | $130 | $15 | |||||
| South Dakota | Dry | $135 | $135 | $0 | |||||
| ` | ` | ||||||||
| United BioEnergy, Wichita, KS (316-616-3521) | |||||||||
| Kansas | Dry | $140 | $140 | $0 | |||||
| Wet | $65 | $65 | $0 | ||||||
| Illinois | Dry | $148 | $148 | $0 | |||||
| Nebraska | Dry | $140 | $140 | $0 | |||||
| Wet | $65 | $65 | $0 | ||||||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||||||
| Illinois | Dry | $140 | $140 | $0 | |||||
| Indiana | Dry | $130 | $130 | $0 | |||||
| Iowa | Dry | $130 | $130 | $0 | |||||
| Michigan | Dry | $135 | $125 | $10 | |||||
| Minnesota | Dry | $125 | $118 | $7 | |||||
| Nebraska | Dry | $145 | $145 | $0 | |||||
| New York | Dry | $140 | $140 | $0 | |||||
| North Dakota | Dry | $145 | $145 | $0 | |||||
| Ohio | Dry | $135 | $135 | $0 | |||||
| South Dakota | Dry | $135 | $125 | $10 | |||||
| Wisconsin | Dry | $130 | $130 | $0 | |||||
| Valero Energy Corp., San Antonio, TX (402-932-5901) | |||||||||
| Indiana | Dry | $135 | $125 | $10 | |||||
| Iowa | Dry | $130 | $125 | $5 | |||||
| Minnesota | Dry | $125 | $120 | $5 | |||||
| Nebraska | Dry | $145 | $140 | $5 | |||||
| Ohio | Dry | $135 | $135 | $0 | |||||
| South Dakota | Dry | $125 | $120 | $5 | |||||
| California | $200 | $195 | $5 | ||||||
| Western Milling, Goshen, California (559-302-1074) | |||||||||
| California | Dry | $206 | $208 | -$2 | |||||
| *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 | 1/4/2018 | $3.5100 | $125.36 | ||||||
| Soybean Meal | 1/4/2018 | $315.80 | |||||||
| DDG Weekly Average Spot Price | $138.00 | ||||||||
| DDG Value Relative to: | 1/5 | 12/21 | |||||||
| Corn | 110.08% | 106.81% | |||||||
| Soybean Meal | 43.70% | 42.65% | |||||||
| Cost Per Unit of Protein: | |||||||||
| DDG | $5.11 | $4.96 | |||||||
| Soybean Meal | $6.65 | $6.61 | |||||||
| 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 Mary Kennedy on Twitter @MaryCKenn
(BAS/SK)
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