Market Matters Blog

OMAHA (DTN) -- The average price for domestic distillers dried grains (DDG) from the 39 locations DTN contacted with spot offers for the week ended Feb. 11 was $235 per ton, up $1 on average from one week ago. DDG prices remain firm as rail and river logistics are faced with the extreme cold and snow, making DDG movement a challenge for shippers and buyers. The U.S. Grains Council noted besides the cold weather in the Midwest, high natural gas prices are curtailing production and supplies, keeping prices steady.

The Energy Information Administration reported at midweek ethanol plant production gained 1,000 barrels per day (bpd) in the week profiled to 937,000 bpd, 9.3% lower than the corresponding week in 2020. Four-week average output dropped 110,000 bpd against year ago. The cold snap this week could show a slowdown in production in the next EIA report.

Based on the average of prices collected by DTN, the value of DDG relative to corn for the week ended Feb. 11 was 121.62% versus the five-year average of 109%. The value of DDG relative to soybean meal was 54.79% versus the three-year average of 42%. The cost per unit of protein for DDG was $8.70, compared to the cost per unit of protein for soybean meal at $9.03.

In their weekly export DDGS update, USGC noted brokers and merchandisers report spot prices remain elevated, if offers can be obtained, due to logistics issues along the rivers. "Demand remains steady and brokers report a solid round of business has been done this week. Barge CIF NOLA offers are up $2 metric ton (mt) for March/April shipment and FOB Gulf offers are $2 mt higher for the same time period. U.S. rail rates are slightly lower while 40-foot containers to Southeast Asia are offered $2 to $3 mt lower than last week. One source noted that the roughly $50 inverse in soymeal futures and an 80-cent inverse in corn futures from March to December is creating a similar inverse in DDGS prices. March FOB Gulf offers average $324 mt while October/November/December prices are near $265 mt," said USGC.

The U.S. Census Bureau reported on Feb. 5 U.S. exports of DDGS totaled 842,738 mt in December, down from 927,604 mt in November, but up 10% from a year ago. Mexico was the top destination in 2020, taking 16% of U.S. exports, followed by Vietnam and South Korea. For all of 2020, U.S. exports of DDGS were up 2% from the previous year.

NOTE: All prices listed below can change at any time and are subject to confirmation from seller.

**

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

Follow her on Twitter @MaryCKenn

(c) Copyright 2021 DTN, LLC. All rights reserved.