DTN Weekly Distillers Grains Update
DDG Prices Drop, Export Demand Sluggish
OMAHA (DTN) -- After remaining stable in recent weeks, prices of dried distillers grains took a dip this week due to declining export demand, an oversupply of feed ingredients and barge markets down.
The DTN weekly DDG spot price average fell $3 per ton since last week, from $127 per ton to $124 per ton. Although the average has hovered between $125 and $130 for the past 13 weeks, this is the lowest the average has reached since mid-December.
According to Michael Peterson, senior merchandiser for U.S. Commodities in Minneapolis, DDG prices had remained relatively steady in recent weeks due to steady prices of corn and soybean meal, which are DDG's biggest competing feed ingredients.
He added that distillers grains have continued to stay firmer on the nearby than on the deferreds.
The impending spring maintenance shutdowns at ethanol plants may raise DDG prices somewhat in coming months. Most plants take downtime in April and May for bi-annual maintenance, which cuts supply slightly and pushes prices higher.
"With the upcoming downtime that we'll have here in April, I look for there to be a bit of a premium on the nearby," Peterson said.
Export demand from several countries, especially China, has been falling in recent weeks, he said. The lack of Chinese buying is due mostly to China's ongoing DDG anti-dumping and countervailing duties investigation against the U.S. Chinese buyers seem to be hesitant to buy U.S.-produced DDG too far out, fearing that in the future China may impose heavy duties on DDG as a result on the investigation.
"Export interests seem to have slowed up a bit from some countries, which we're seeing in forms of lower bids at the Gulf and some cheaper containers sold overseas," he said.
While domestic demand is good, it had been better as the lower prices of canola meal won out in some rations, he said. But that has now changed.
"Recently, canola prices have firmed back up and distillers has worked it out," Peterson said. "So I guess I'm optimistic we're going to see people increase their usage of DDG here in the coming weeks."
Supplies of DDG have been good and buyers are usually able to find the product they need and logistics are good as well.
"Freight has been easy to come by, whether it's by truck or getting things moved where you need to by rail cars," Peterson said. "The market is very efficient right now."
Peterson said that barges will start being loaded in Minneapolis beginning next week, adding that is more due to routine maintenance by the Army Corps of Engineers than river conditions.
In coming weeks, Peterson said prices should remain fairly steady.
"I don't look for prices to change too much, unless we happen to get some really great weather and can get corn in early and get some good crop progress going, but that's weeks ahead," he said.
Livestock producers who need to purchase product may find this is a good time to shore up some of their needs, as there is a chance that the planting season could bring some unexpected volatility.
"Prices of DDG relative to other ingredients right now are at a fair price," Peterson said. "So having what you need locked in for the next few months seems like a good idea."
The value of DDG relative to corn this week was at about 94%, down from 98% last week. The value of DDG relative to soybean meal fell only slightly, from about 47% to about 46%.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com
Follow Cheryl Anderson on Twitter @CherylADTN
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IN THE NEWS
U.S. Ethanol Exports Strong, While DDGS Exports Fall
Exports of U.S. ethanol have been robust so far in 2016, and in fact, grew 7% during December, reaching a 14-month high, according to an article by Ethanol Producer (http://bit.ly/…).
Approximately 87.1 million gallons of ethanol were exported, with a third of that total purchased by China.
But while exports of ethanol have begun the year strong, exports of U.S. dried distillers grains with solubles have fallen, decreasing 19% in February to 800,580 metric tons. Much of the decline was due to decreased purchasing by China, Spain and Turkey, although robust exports to Mexico helped offset those losses to some extent.
The decrease in exports to China was likely caused by the current anti-dumping and countervailing duties investigation against the U.S. that China announced Jan. 12 to see if U.S. agricultural policies in some way create unfair competition.
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Chinese buyers may be hesitant to buy U.S. DDGS too far out, in case heavy duties are imposed as a result of the investigation. The drop in Chinese demand has contributed to the decrease in exports, as China has been the largest DDGS export market for the U.S. in recent years. China was the largest importer of U.S. DDGS in 2015, importing nearly 6.3 million metric tons at a value of nearly $1.6 billion.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
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DTN WEEKLY DDG SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 3/18/2016 | 3/11/2016 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $135 | $135 | $0 | |
| Modified | $65 | $65 | $0 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $135 | $138 | -$3 | |
| Indiana | Dry | $128 | $135 | -$7 | |
| Iowa | Dry | $125 | $128 | -$3 | |
| Michigan | Dry | $130 | $135 | -$5 | |
| Minnesota | Dry | $115 | $118 | -$3 | |
| North Dakota | Dry | $115 | $122 | -$7 | |
| New York | Dry | $135 | $138 | -$3 | |
| South Dakota | Dry | $115 | $122 | -$7 | |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $130 | $135 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $127 | $132 | -$5 | |
| Iowa | Dry | $118 | $122 | -$4 | |
| Michigan | Dry | $125 | $128 | -$3 | |
| Minnesota | Dry | $118 | $118 | $0 | |
| Missouri | Dry | $138 | $140 | -$2 | |
| Ohio | Dry | $126 | $128 | -$2 | |
| South Dakota | Dry | $120 | $120 | $0 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $135 | $130 | $5 | |
| Wet | $50 | $50 | $0 | ||
| Illinois | Dry | $140 | $140 | $0 | |
| Nebraska | Dry | $135 | $130 | $5 | |
| Wet | $50 | $50 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $125 | $130 | -$5 | |
| Indiana | Dry | $120 | $125 | -$5 | |
| Iowa | Dry | $115 | $120 | -$5 | |
| Michigan | Dry | $125 | $130 | -$5 | |
| Minnesota | Dry | $115 | $115 | $0 | |
| Nebraska | Dry | $130 | $125 | $5 | |
| New York | Dry | $145 | $150 | -$5 | |
| North Dakota | Dry | $120 | $120 | $0 | |
| Ohio | Dry | $124 | $128 | -$4 | |
| South Dakota | Dry | $115 | $120 | -$5 | |
| Wisconsin | Dry | $120 | $120 | $0 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $122 | $128 | -$6 | |
| Iowa | Dry | $118 | $120 | -$2 | |
| Minnesota | Dry | $114 | $116 | -$2 | |
| Nebraska | Dry | $125 | $130 | -$5 | |
| Ohio | Dry | $130 | $135 | -$5 | |
| South Dakota | Dry | $110 | $112 | -$2 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $188 | $190 | -$2 | |
| *Prices listed per ton. | |||||
| Weekly Average | $124 | $127 | -$3 | ||
| 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@dtn.com.
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 3/17/2016 | $3.6850 | $131.61 | |
| Soybean Meal | 3/17/2016 | $267.00 | ||
| DDG Weekly Average Spot Price | $124.00 | |||
| DDG Value Relative to: | 3/18 | 3/11 | 3/4 | |
| Corn | 94.22% | 98.10% | 102.11% | |
| Soybean Meal | 46.44% | 47.00% | 49.24% | |
| Cost Per Unit of Protein: | ||||
| DDG | $4.96 | $5.08 | $5.16 | |
| Soybean Meal | $5.62 | $5.69 | $5.52 | |
| 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 (Mar 11, 2016)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 120.00-130.00 | 52.00-65.00 | 38.00-41.00 |
| Minnesota | 115.00-125.00 | 55.00 | 38.00-45.00 |
| Nebraska | 125.00-140.00 | 60.00-75.00 | 48.00-55.00 |
| South Dakota | 115.00-128.50 | 62.00-68.00 | 40.00-44.00 |
| Wisconsin | 120.00-130.00 | 52.00-60.00 | NQ |
| Eastern Corn Belt | 124.00-155.00 | 62.00-67.00 | NQ |
| Kansas | 135.00-153.00 | NQ | 45.00-60.00 |
| Northern Missouri | 135.00-148.00 | NQ | 38.00-49.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 152.00-163.00 | ||
| Pacific Northwest | 176.00-185.00 | ||
| California | 180.00-187.00 | ||
| Texas Border (metric ton) | 195.00-210.00 | ||
| Lethbridge AB | 152.00 | ||
| Chicago | 139.00-145.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Mar 15, 2016)
Distillers Dry Grains
Rail to California Points 180.00-186.00 unch
FOB Truck to California Points 188.00-196.00 up 3.00-5.00
PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Mar 15, 2016)
Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were steady from 180.00-190.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady from 198.00-205.00.
*All prices quoted per ton unless otherwise noted.
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NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION
Dry and Wet Mill, Co-products and Products Produced - United States
December 2015 - January 2016
Mar. 1, 2016
Highlights:
Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.87 million tons during January 2016, down 4 percent from December 2015 but up 2 percent from January 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.31 million tons in January 2016, down 6 percent from December 2015 and down 11 percent from January 2015.
Wet mill corn gluten feed production was 322.0 thousand tons during January 2016, down 5 percent from December 2015 but up slightly from January 2015. Wet corn gluten feed 40 to 60 percent moisture was 291.9 thousand tons in January 2016, down 5 percent from December 2015 and down 7 percent from January 2015.
| Co-products and Products | Jan 2015 | Dec 2015 | Jan 2016 |
| Dry Mill | tons | ||
| Condensed distillers solubles (CDS-syrup) | 162,127 | 134,196 | 133,919 |
| Corn oil | 103,780 | 130,652 | 124,541 |
| Distillers dried grains (DDG) | 438,936 | 423,632 | 383,131 |
| Distillers dried grains with solubles (DDGS) | 1,831,393 | 1,941,708 | 1,869,722 |
| Modified distillers wet grains (DWG) <65% moisture | 1,480,431 | 1,398,280 | 1,311,155 |
| Modified distillers wet grains (DWG) 40-64% moisture | 476,760 | 442,448 | 449,256 |
| Wet Mill | |||
| Corn germ meal | 71,492 | 69,669 | 63,787 |
| Corn gluten feed | 321,768 | 340,460 | 321,956 |
| Corn gluten meal | 90,617 | 88,921 | 87,266 |
| Corn oil | 41,961 | 57,578 | 45,976 |
| Wet corn gluten feed 40-60% moisture | 313,400 | 307,874 | 291,882 |
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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
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, or e-mail cheryl.anderson@dtn.com.
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