DTN Weekly Distillers Grains Update

Lack of Demand Pushes DDG Prices to 10-Month Low

Dried distillers grains prices fell to their lowest point since December 2014 due to lackluster demand from both domestic and export markets.

The DTN weekly DDG spot price average fell another $6 in the past two weeks, from $128 on Sept. 11 to $122 this week. This is the lowest point the average has reached in nearly 10 months, since early December 2014.

Of the 36 Midwestern locations DTN collects spot prices from, 29 locations reported decreases between $3 per ton and $15 per ton in the past two weeks, though most price decreases were in the $5 and $10 per ton range.

Merchandisers told DTN that domestic and foreign buying have been slow in recent weeks. China has been revamping requirements for its DDG importers, who must now register information regarding all shipments of DDG and other specified grains and apply for import permits for shipments; this began Sept. 1. With China being the largest importer of U.S. DDG, that has put a serious dent in exports in recent weeks.

Also hindering exports is that other countries seem to be just buying hand-to-mouth for the time being to see if prices will fall.

Domestic demand is also down. With prices of DDG falling for nine consecutive weeks, some local buyers seem to be returning to the market. And while those domestic end users are taking up a small bit of the slack in export sales, it still is not enough to bump up inclusion rates in livestock rations to a level high enough to keep prices from falling further.

Most local buyers seem to have what they need on hand, as corn and beans seem to be plentiful at present. So, they have no reason to pay more for DDG when they have plenty of protein and feedstuffs on hand.

Some merchandisers predicted this downward trend will continue for at least a few more weeks before a rebound in prices materializes.

The value of DDG relative to corn took a tumble this week as DDG prices continued to fall, dropping from about 105% two weeks ago to about 90% this week. The value of DDG relative to soybean meal this week was about 40%.

The cost per unit of protein for DDG was about $4.88 this week, compared to the cost per unit of protein for soybean meal at $6.37.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com.

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IN THE NEWS

Taiwanese Grain Buyers Visit U.S.

A delegation of grain buyers and other industry members visited Washington, D.C. recently and signed letters of intent to purchase U.S. corn and dried distillers grains with solubles, according to an article by the U.S. Grains Council (http://bit.ly/…).

The trip was part of a biennial visit aimed at strengthening economic ties between Taiwan and the U.S.

Signed during a special ceremony, the letters of intent committed to nearly $3 billion in sales by 2017: 5 million metric tons of U.S. corn and 0.5 million tons of U.S. DDGS valued at $1.23 billion.

In the 2014-2015 marketing year, Taiwan was the sixth-largest buyer of U.S. corn, the third-largest buyer of U.S. barley, and one of the top buyers of U.S. DDGS.

The Council believes the letter of intent is evidence of Taiwan's commitment to maintaining its trade partnership with the U.S.

Council Chairman Alan Tiemann said, "This mission helps maintain an open dialogue between U.S. and Taiwanese government officials, traders and end-users, which is key to maintaining a healthy trade relationship with this top buyer."

Besides meeting with the Council, the Taiwanese delegation also met with U.S. Wheat Associates, the U.S. Soybean Export Council, the National Grain and Feed Association and U.S. government officials, as well as touring U.S. farms and grain elevators in Iowa, Illinois, Kentucky and Minnesota.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com.

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 9/25/2015 9/18/2015 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $148 $155 -$7
Modified $65 $70 -$5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $140 -$5
Indiana Dry $130 $138 -$8
Iowa Dry $120 $135 -$15
Michigan Dry $135 $140 -$5
Minnesota Dry $115 $120 -$5
North Dakota Dry $120 $125 -$5
New York Dry $155 $160 -$5
South Dakota Dry $115 $125 -$10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $135 $135 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $130 $135 -$5
Iowa Dry $120 $120 $0
Michigan Dry $135 $140 -$5
Minnesota Dry $115 $120 -$5
Missouri Dry $135 $135 $0
Ohio Dry $130 $130 $0
South Dakota Dry $115 $120 -$5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $142 $145 -$3
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $130 $135 -$5
Indiana Dry $120 $130 -$10
Iowa Dry $110 $115 -$5
Michigan Dry $120 $135 -$15
Minnesota Dry $105 $115 -$10
Nebraska Dry $115 $120 -$5
New York Dry $145 $145 $0
North Dakota Dry $105 $115 -$10
Ohio Dry $120 $130 -$10
South Dakota Dry $105 $115 -$10
Wisconsin Dry $120 $125 -$5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $115 $120 -$5
Iowa Dry $110 $120 -$10
Minnesota Dry $105 $115 -$10
Nebraska Dry $115 $125 -$10
Ohio Dry $130 $130 $0
South Dakota Dry $105 $110 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $190 $190 $0
*Prices listed per ton.
Weekly Average $122 $128 -$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@dtn.com.

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VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 9/24/2015 $3.8150 $136.25
Soybean Meal 9/24/2015 $302.40
DDG Weekly Average Spot Price $128.00
DDG Value Relative to: 9/27 9/18 9/11
Corn 89.54% 105.48% 105.48%
Soybean Meal 40.34% 41.39% 41.39%
Cost Per Unit of Protein:
DDG $4.88 $5.24 $5.24
Soybean Meal $6.37 $6.66 $6.66
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 (Sep 18, 2015)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 120.00-130.00 55.00-65.00 35.00-41.00
Minnesota 120.00-140.00 60.00 36.00-40.00
Nebraska 120.00-149.00 65.00-70.00 45.00-50.00
South Dakota 113.00-122.00 55.00-68.00 39.00-43.00
Wisconsin 130.00-150.00 57.00-75.00 NQ
Eastern Corn Belt 125.00-150.00 46.00-65.00 NQ
Kansas 135.00-160.00 NQ 45.00-60.00
Northern Missouri 130.00-148.00 NQ 40.00-45.00
DELIVERED PRICES PER TON
CIF NOLA 152.00-165.00
Pacific Northwest 165.00-170.00
California 165.00-180.00
Texas Border (metric ton) 185.00-210.00
Lethbridge AB 140.00
Chicago 135.00-150.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Sep 22, 2015)

Distillers Dry Grains

  Rail to California Points         178.00-195.00    dn 2.00-unch
  FOB Truck to California Points    182.00-195.00    up 2.00-unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Sep 22, 2015)

Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 3.00 lower from 173.00-180.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 3.00 lower from 191.00-195.00.

*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

May 2015 - July 2015

Sep 1, 2015

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 2.00 million tons during July 2015, up 1 percent from June 2015 and up 6 percent from May 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.14 million tons in July 2015, up slightly from June 2015 but down 7 percent from May 2015.

Wet mill corn gluten feed production was 333.8 thousand tons during July 2015, up 4 percent from June 2015 but down 5 percent from May 2015. Wet corn gluten feed 40 to 60 percent moisture was 315.1 thousand tons in July 2015, up 3 percent from June 2015 but down 3 percent from May 2015.

Co-products and Products May 2015 Jun 2015 Jul 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 148,637 145,244 149,927
Corn oil 118,281 120,582 125,497
Distillers dried grains (DDG) 418,448 407,259 450,829
Distillers dried grains with solubles (DDGS) 1,892,983 1,976,508 2,000,851
Modified distillers wet grains (DWG) <65% moisture 1,228,598 1,136,491 1,137,600
Modified distillers wet grains (DWG) 40-64% moisture 417,888 367,092 350,460
Wet Mill
Corn germ meal 69,135 63,188 68,528
Corn gluten feed 350,141 321,209 333,828
Corn gluten meal 97,295 92,237 97,130
Corn oil 53,208 51,281 53,364
Wet corn gluten feed 40-60% moisture 325,292 306,354 315,090

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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.)
8/28/15 93683 9685 1793 105161 5577115
9/04/15 94671 9787 1812 106270 5635945
9/11/15 94967 9818 1818 106603 5653594
9/18/15 92695 9583 1775 104052 5518284

*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

http://ncga.com/…

*Iowa Corn

http://www.iowacorn.org/…

Nebraska Corn Board

http://www.nebraskacorn.org/…

*Renewable Fuels Association - Ethanol Co-Products

http://www.ethanolrfa.org/…

*American Coalition for Ethanol

http://www.ethanol.org/…

*U.S. Grains Council

http://www.grains.org/…

*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

http://www.ddgs.umn.edu

*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

http://beef.unl.edu/…

*University of Nebraska Extension

http://ianrpubs.unl.edu/…

*Iowa Beef Center - Iowa State University

http://www.iowabeefcenter.org/…

*University of Missouri - Byproducts Resource Page

http://agebb.missouri.edu/…

*South Dakota State University - Dairy Science Department - Dairy cattle research

http://dairysci.sdstate.edu/…

(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.

(AG)