Market Matters Blog

OMAHA (DTN) -- The domestic distillers dried grains (DDG) average spot price from the 40 locations DTN contacted was $3 lower at $141 per ton for the week ended Feb. 7 versus the prior week.

Spot truck values collected by DTN are steady to lower again this week, even as ethanol plant production dropped by the most in three weeks. Production was down 45,000 barrels per day (bpd) to 967,000 million bpd with output down 8.5% from a year ago, according to weekly energy data. Buyers are still not ready to increase inclusion rates in rations, but as DDG prices continue to get cheaper, they should return to buying.

Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Feb. 7 was at 106.35%. The value of DDG relative to soybean meal was at 46.81%. The cost per unit of protein for DDG was $5.30, compared to the cost per unit of protein for soybean meal at $6.43.

CIF NOLA distillers dried grains with solubles (DDGS) prices are firm, as river conditions remain messy. Ice on the Illinois River is causing slowdowns as it moves down river and high water in the Lower Mississippi River, coupled with heavy fog in the Gulf, has slowed barge traffic heading south and slowed and/or stalled vessel loadings in the Gulf. ACBL noted that at the Gulf, the canals will experience wind delays beginning Friday and lasting until Saturday afternoon. "There will be a brief 24-48 hour window of improved conditions, but then fog is expected to roll back in early next week. Expect significant delays in pickup and transit time."

The U.S. Census Bureau said Wednesday that U.S. exports of DDGS totaled 1,016,544 mt in November, a little less than October, but up 16% from a year ago. U.S DDGS continue to find broad interest with Mexico, Vietnam, Indonesia, Thailand and South Korea listed as the top five destinations, accounting for 58% of exports in November. The first eleven months of 2018 showed exports of U.S. DDGS up 9% from a year ago.

However, as of Jan.1, 2019, Thailand stopped buying U.S. DDGS because of a new fumigation requirement imposed after beetles were discovered in a shipment in late 2018. Regulations require all DDGS shipments entering the country to be fumigated with methyl bromide, but U.S. shippers prefer to use phosphine. This is the same issue that caused Vietnam imports of DDGS to be stalled for almost one year between fall 2016 and fall 2017, finally ending after Vietnam eased fumigation requirements. Merchandisers told DTN that the Thai Ministry of Agriculture has been quiet on this issue to date.

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

Follow her on Twitter @MaryCKenn

(SK/AG)

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