DTN Weekly Distillers Grains Update
West Coast DDG Prices May Rise Due to Tightness in Railcars
DAVENPORT, Neb. -- Prices of dried distillers grains have continued to rise in recent weeks, especially for delivered prices. However, Midwest truck prices are not as strong as delivered prices.
Sean Broderick, senior merchandiser for CHS in Minneapolis, told DTN that the higher delivered prices are partially due to a shortage of railcars, especially in California and the Pacific Northwest.
"Demand is strong on the coast," Broderick said, "but cars are moving slower so people are not able to sell or receive as much." Protein is also more expensive, and DDGS prices are being affected by that as well.
In the Midwest, prices may remain more on the steady side. Although prices may seem high, they are probably not unreasonably so.
"We're on the expensive side as a historical percentage of corn, but cash corn is hard to come by," he said. "But we're probably fairly priced for the truck market in the Midwest."
The DTN weekly DDG spot price average has been rising every week since early November, climbing a total of $13 per ton in the past four weeks. The average rose from $205 per ton the first week of November to this week's average of $218 per ton.
Although supplies of DDG continue to be tight due to ethanol plants being oversold, Broderick said that tightness may continue, as demand from the West Coast may keep supplies on the "tightish" side. On the other hand, he pointed out that ethanol plant margins are healthy.
"Plants are making more money than they have in a long time," he said. "If they have the ability for extra production, they are going to throw out there. But so far, we have not been seeing a lot of extra production, if at all."
Midwest DDG demand remains fairly steady, but the stronger domestic demand is driven more in delivered areas because of the lack of railcars, he said.
Export demand has also remained fairly steady.
"The numbers for trading delivered Chicago or container yard on the West Coast are more than delivered prices in China or Asia," he said. "That tells me the tightness in the market is not being driven by new demand, but re-sellers buying in to cover what they've already sold."
In coming weeks, Broderick said, even if prices don't continue to rise on the coast, the market will remain tight.
He advised livestock producers who need to buy DDG to get what they need for the remainder of December. "We may see competing prices fall, but there is enough pent-up nearby demand to keep any DDGS weakness in check."
Cheryl Anderson can be reached at cheryl.anderson@telventdtn.com.
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IN THE NEWS
Council Develops DDGS Market in Jordan
Efforts by the U.S. Grains council to promote U.S. dried distillers grains with solubles in Jordan have resulted in a huge increase in demand, according to an article on the council's website (http://bit.ly/…).
The council has increased the market for DDGS through a series of efforts, including a feed trial and a field day seminar with trial results, as well as bring a high-level team from Jordan to the U.S.
Those ventures have resulted in Jordan's purchasing of U.S. DDGS from nothing in 2009 to more than 20,000 metric tons between January and August 2013.
Hammoudeh Farm hosted the feeding trial and has continued to import DDGS. Hammoudeh Grain has been selling DDGS to Jordanian dairy and poultry farms and feed companies.
Hammoudeh Grain and Council member Mirasco also collaborated to host a seminar on utilizing U.S. DDGS in Jordan. The Council presented information about U.S. corn and DDGS supply, as well as uses for DDGS in countries in the Middle East and North Africa region. The Council is also maintaining and developing relationships with importers, government officials and livestock producers in Jordan.
Rally Opposes EPA Ethanol Proposal
An ethanol plant in Nevada, Iowa, hosted a rally Friday to oppose the Environmental Protection Agency's proposal to lower the Renewable Fuel Standard, according to an article by The Cedar Rapids Gazette (http://bit.ly/…).
The rally was attended by many of the state's top Republicans who oppose the proposal to lower the ethanol mandate by a billion gallons for 2014.
Iowa Lt. Gov. Kim Reynolds stood in front of a growing pile of dried distillers grains and joined with other state politicians in berating the proposal, claiming that ethanol has created many jobs and boosted rural economies and that lower the mandate would hurt farmers, communities and the state.
Politicians from other states are also opposing the measure and are urging their constituents to send comments to the EPA during the two-month public comment period.
Some in the petroleum and meat producer industries welcome the measure, but said they would rather see the RFS entirely revoked. Some livestock farmers support cuts to federal support for ethanol, claiming it pushes corn and meat prices up, as well as their profit margins.
Lowering the RFS and cutting ethanol production would also result in lower DDG production. With demand and utilization of DDG thriving, especially export demand, decreased supplies would likely push DDG prices up. Higher DDG prices would not only force livestock producers to look to other feedstuffs, but would hurt ethanol plant profits as the sale of DDG is a vital revenue stream.
USGC Targets Korean DDGS Importers
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Recent efforts by the U.S. Grains Council have been aimed at Korea's booming market for U.S.-produced dried distillers grains with solubles, according to an article by the Council (http://bit.ly/…).
Korean nutritionists have gained more confidence in including DDGS in swine rations, causing Korea's imports to increase more than 100%.
In response to that growth, the council recently hosted a webinar aimed at feed formulators, swine extension specialists and pork producers in order to share information more broadly among the industry.
The programs also provided participants with information on swine management practice, including the feeding value of DDGS in swine rations. Even though feed millers and farmers are familiar with DDGS, the country's swine industry lacks experience with DDGS. So currently, inclusion rates are very low in Korea compared to what is utilized in the U.S.
The Council estimates that if all livestock and poultry sectors in Korea begin using DDGS at recommended levels, imports of U.S. DDGS to Korea could increase by 1.5 million metric tons.
Cheryl Anderson can be reached at Cheryl.anderson@telventdtn.com.
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DTN WEEKLY DISTILLERS GRAIN SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 12/6/2013 | 11/22/2013 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $225 | $218 | $7 | |
| Modified | $118 | $113 | $5 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | NO | NO | ||
| Indiana | Dry | $220 | $215 | $5 | |
| Iowa | Dry | $220 | $210 | $10 | |
| Michigan | Dry | $225 | $220 | $5 | |
| Minnesota | Dry | $215 | $200 | $15 | |
| North Dakota | Dry | $190 | $190 | $0 | |
| New York | Dry | $230 | $235 | -$5 | |
| South Dakota | Dry | $205 | $195 | $10 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | $224 | $224 | $0 | |
| Modified | $100 | $100 | $0 | ||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $212 | $212 | $0 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $215 | $205 | $10 | |
| Wet | $95 | $85 | $10 | ||
| Illinois | Dry | $230 | $230 | $0 | |
| Nebraska | Dry | $215 | $205 | $10 | |
| Wet | $95 | $85 | $10 | ||
| Wisconsin | Dry | $225 | $228 | -$3 | |
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $230 | $225 | $5 | |
| Indiana | Dry | $225 | $220 | $5 | |
| Iowa | Dry | $205 | $205 | $0 | |
| Michigan | Dry | $225 | $220 | $5 | |
| Minnesota | Dry | $200 | $200 | $0 | |
| Nebraska | Dry | $215 | $210 | $5 | |
| New York | Dry | $235 | $230 | $5 | |
| North Dakota | Dry | $200 | $195 | $5 | |
| Ohio | Dry | $220 | $215 | $5 | |
| South Dakota | Dry | $200 | $195 | $5 | |
| Wisconsin | Dry | $220 | $220 | $0 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $225 | $220 | $5 | |
| Iowa | Dry | $220 | $205 | $15 | |
| Minnesota | Dry | $215 | $200 | $15 | |
| Nebraska | Dry | $220 | $210 | $10 | |
| Ohio | Dry | $225 | $220 | $5 | |
| South Dakota | Dry | $225 | $195 | $30 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $303 | $290 | $13 | |
| *Prices listed per ton. | |||||
| Weekly Average | $218 | $212 | $6 | ||
| 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. | |||||
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@telventdtn.com.
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 12/5/2013 | $4.2275 | $150.98 | |
| Soybean Meal | 12/5/2013 | $446.10 | ||
| DDG Weekly Average Spot Price | $218.00 | |||
| DDG Value Relative to: | 12/6 | 11/29 | 11/22 | |
| Corn | 144.39% | 142.26% | 140.33% | |
| Soybean Meal | 48.87% | 47.54% | 51.58% | |
| Cost Per Unit of Protein: | ||||
| DDG | $8.72 | $8.48 | $8.48 | |
| Soybean Meal | $9.39 | $9.39 | $8.65 | |
| Notes: | ||||
| Corn and soybean prices taken 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 25. | ||||
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USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Nov 29, 2013)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 195.00-224.00 | 95.00-110.00 | 62.00-68.00 |
| Minnesota | 195.00-215.00 | 95.00 | 80.00 |
| Nebraska | 200.00-217.00 | 95.00-105.00 | 57.00-66.00 |
| South Dakota | 189.00-195.00 | 87.50-88.00 | 62.00-72.00 |
| Wisconsin | 208.00-220.00 | 97.00-100.00 | NQ |
| Eastern Corn Belt | 210.00-232.00 | 105.00-112.00 | NQ |
| Kansas | 210.00-225.00 | NQ | 60.00-70.00 |
| Northern Missouri | 213.00-215.00 | NQ | 67.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 280.00-305.00 | ||
| Pacific Northwest | 278.00-294.00 | ||
| California | 285.00-295.00 | ||
| Texas Border | 313.00-335.00 | ||
| Lethbridge AB | 225.00 | ||
| Chicago | 245.00-255.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Dec 3, 2013)
Distillers Dry Grains
FOB Truck Offers 282.00-285.00 up 2.00-unch
Rail Delivered California Points Offers 290.00-296.00 unch-up 4.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Dec 3, 2013)
Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were 285.00-288.00, steady to 3.00 higher compared to week ago offers. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were 300.00-306.00, steady to 3.00 higher than last week's offers.
*All prices quoted per ton unless otherwise noted.
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RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) | |||||
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 11/08/13 | 92232 | 9470 | 1754 | 103456 | 4828097 |
| 11/15/13 | 89943 | 9235 | 1710 | 100889 | 4708306 |
| 11/22/13 | 92232 | 9470 | 1754 | 103456 | 4828097 |
| 11/29/13 | 90839 | 9327 | 1727 | 101894 | 4755181 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
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DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
*Iowa Corn
Nebraska Corn Board
*Renewable Fuels Association - Ethanol Co-Products
*American Coalition for Ethanol
*U.S. Grains Council
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
*University of Nebraska Extension
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
*South Dakota State University - Dairy Science Department - Dairy cattle research
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
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DDG CONFERENCES
*Distillers Grains Technology Council Inc.'s 16th Annual Distillers Grains Symposium
The Distillers Grains Technology Council will hold its 18th Annual Distillers Grains Symposium on May 14-15, 2014, at the Omni Mandalay at Las Colinas, Dallas, Texas. For information, contact the DGTC office at (502) 852-1575 or (800) 759-3448, or check the DGTC website (http://www.distillersgrains.org).
(If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183-1527, or e-mail cheryl.anderson@telventdtn.com.
(AG/SK)
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