DTN Weekly Distillers Grains Update
Slow Export Demand Pushes DDG Prices Further Downward
OMAHA (DTN) -- Lackluster export demand pushed prices of dried distillers grains to continue a five-week downward trend this week.
Export markets are down with bids coming in low and cheaper values coming back to domestic buyers. Chinese buyers seems to be waiting to see what happens with the anti-dumping countervailing investigation China launched against the U.S. Fearing the government may begin instituting high tariffs or duties, few Chinese buyers are wanting to buy until they know the outcome. A decision on the investigation is expected by the end of April or the first of May.
China's DDG purchases were still up from last year, at least in January. According to USDA's Foreign Agricultural Service, China imported about 219,000 metric tons of DDG worth about $46 million in January 2016, compared to about 170,000 mt worth about $39 million in January 2015.
Other countries seem to be putting off purchases until they absolutely have to buy. Also hindering exports is some tightness in availability of shipping containers.
There is a lack of activity in domestic markets as well; domestic prices are also trending lower and plants have few sales on the book for April forward. Domestic buyers seem to just be buying week to week, with few forward sales, in case prices continue to fall.
Going forward, bids are predicted to be lower for both domestic and export buyers, as April deals have already been trading lower.
The DTN weekly spot price average fell for the fifth week in a row, from $124 per ton last week to $122 per ton this week. The average has fallen $8 per ton since the first week of March, from $130 per ton to this week's average of $122. This is the lowest the average has reached since early December 2015.
Of the 36 Midwestern locations DTN collects spot prices from, 17 locations reported their DDG spot prices decreased between $1 and $7 per ton in the past week, though most price changes were in the $3 to $5 per ton range. Prices at 19 locations remained unchanged since last week. No price increases were reported to DTN.
The value of DDG relative to corn this week was at about 92%, down from 94% last week. The value of DDG relative to soybean meal also fell from about 46% last week to about 44% this week.
The cost per unit of protein for DDG this week was about $4.88, compared to the cost per unit of protein for soybean meal at $5.80.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com
Follow Cheryl Anderson on Twitter @CherylADTN
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IN THE NEWS
New DDG Demand Possible in Chile, Peru
A trade development mission last week revealed the possibility of increasing ag export markets in Chile and Peru, especially for feed ingredients such as U.S. grains and dried distillers grains with solubles.
According to an article by the U.S. Grains Council (http://bit.ly/…), the trade mission was led by U.S. Secretary of Agriculture Tom Vilsack along with members of the Council and participants from 34 agribusinesses and organizations. The trip's goal was to assess potential growth of exports of U.S. ag products to Chile and Peru in light of the free trade agreements in place between both countries and the U.S.
During the mission, the U.S. team met with potential customers, such as a Chilean company that is one of its largest protein providers. That company alone uses 2.2 million metric tons of feed ingredients annually and could be a potential new buyer of U.S. grains.
USGC Chairman Alan Tiemann said that the Chilean company indicated interest in both U.S. DDGS and soybean meal, but said that issues with logistical constraints and high prices have hindered its purchasing of U.S. Grains in the past.
Peru markets are committed to free and open trade, and the U.S. team especially pushed to expand the country's imports of U.S. ethanol in light of the 3,000 barrels per day the country needs to meet its mandate of 7.8% blend.
It is trade missions such as these, as well as other efforts by the Council, which have increased demand in many countries. This offsets the drop in DDG exports to China because of the country's recent anti-dumping and countervailing duties investigation against the U.S. This latest investigation has had much less of a devastating effect on the DDG market than the last investigation in 2010.
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 | 3/18/2016 | 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 | $128 | $135 | -$7 | |
| Indiana | Dry | $125 | $128 | -$3 | |
| Iowa | Dry | $120 | $125 | -$5 | |
| Michigan | Dry | $130 | $130 | $0 | |
| Minnesota | Dry | $110 | $115 | -$5 | |
| North Dakota | Dry | $110 | $115 | -$5 | |
| New York | Dry | $135 | $135 | $0 | |
| South Dakota | Dry | $110 | $115 | -$5 | |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $130 | $130 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $120 | $127 | -$7 | |
| Iowa | Dry | $115 | $118 | -$3 | |
| Michigan | Dry | $122 | $125 | -$3 | |
| Minnesota | Dry | $115 | $118 | -$3 | |
| Missouri | Dry | $134 | $138 | -$4 | |
| Ohio | Dry | $124 | $126 | -$2 | |
| South Dakota | Dry | $119 | $120 | -$1 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $132 | $135 | -$3 | |
| Wet | $50 | $50 | $0 | ||
| Illinois | Dry | $133 | $140 | -$7 | |
| Nebraska | Dry | $132 | $135 | -$3 | |
| Wet | $50 | $50 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $125 | $125 | $0 | |
| Indiana | Dry | $120 | $120 | $0 | |
| Iowa | Dry | $115 | $115 | $0 | |
| Michigan | Dry | $120 | $125 | -$5 | |
| Minnesota | Dry | $115 | $115 | $0 | |
| Nebraska | Dry | $125 | $130 | -$5 | |
| New York | Dry | $145 | $145 | $0 | |
| North Dakota | Dry | $120 | $120 | $0 | |
| Ohio | Dry | $124 | $124 | $0 | |
| South Dakota | Dry | $110 | $115 | -$5 | |
| Wisconsin | Dry | $118 | $120 | -$2 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $122 | $122 | $0 | |
| Iowa | Dry | $118 | $118 | $0 | |
| Minnesota | Dry | $114 | $114 | $0 | |
| Nebraska | Dry | $125 | $125 | $0 | |
| Ohio | Dry | $130 | $130 | $0 | |
| South Dakota | Dry | $110 | $110 | $0 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $188 | $188 | $0 | |
| *Prices listed per ton. | |||||
| Weekly Average | $122 | $124 | -$2 | ||
| 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 | 3/24/2016 | $3.7000 | $132.14 | |
| Soybean Meal | 3/24/2016 | $275.30 | ||
| DDG Weekly Average Spot Price | $122.00 | |||
| DDG Value Relative to: | 3/25 | 3/18 | 3/11 | |
| Corn | 92.32% | 94.22% | 98.10% | |
| Soybean Meal | 44.32% | 46.44% | 47.00% | |
| Cost Per Unit of Protein: | ||||
| DDG | $4.88 | $4.96 | $5.08 | |
| Soybean Meal | $5.80 | $5.62 | $5.69 | |
| 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 18, 2016)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 118.00-130.00 | 52.00-65.00 | 38.00-41.00 |
| Minnesota | 115.00-125.00 | 55.00 | 38.00-45.00 |
| Nebraska | 125.00-141.00 | 60.00-75.00 | 48.00-55.00 |
| South Dakota | 115.00-128.50 | 62.00-69.00 | 40.00-44.00 |
| Wisconsin | 120.00-130.00 | 52.00-60.00 | NQ |
| Eastern Corn Belt | 125.00-140.00 | 65.00-67.00 | NQ |
| Kansas | 135.00-153.00 | NQ | 45.00-56.00 |
| Northern Missouri | 135.00-144.00 | NQ | 41.00-49.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 145.00-156.00 | ||
| Pacific Northwest | 176.00-181.00 | ||
| California | 172.00-184.00 | ||
| Texas Border (metric ton) | 190.00-205.00 | ||
| Lethbridge AB | 150.00 | ||
| Chicago | 132.00-145.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Mar 22, 2016)
Distillers Dry Grains
Rail to California Points 180.00-186.00 unch
FOB Truck to California Points 188.00-192.00 unch-dn 4.00
PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Mar 22, 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 |
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
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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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