DTN Weekly Distillers Grains Update

DDG Prices Steady as Market Awaits China Decision

Prices of dried distillers grains continued on a steady trend once again this week, with a market described as "dead" by some merchandisers. Some in the industry are still waiting to see if China makes any announcements about instituting import duties right before Christmas, which has become its custom.

The DTN weekly DDG spot price average remained unchanged in the past week at $122 per ton. The average has hovered between $116 and $123 since late September, continuing on a steady trend.

Of the 36 Midwestern locations from which DTN collects spot prices, 22 locations reported their prices remained unchanged since last week. Spot prices at nine locations increased between $1 and $5 per ton, while only five locations reported price decreases between $2 and $5 per ton.

Merchandisers told DTN this week that there was some spot buying going on, but little other action. While grateful for the lack of volatility, some merchandisers predicted the steady trend to continue and reported that forward prices into January, February and March have also been fairly flat.

Part of the reason for the slow buying could be that the market is waiting for any announcements from China, which was rumored to be considering adding an import duty on any DDG coming into the country.

While there has been no news yet, China seems to have made a habit of waiting until Christmas time the past two years to blast U.S. DDG sellers with some type of market-altering news. On Dec. 28, 2010, China announced its anti-dumping probe against the U.S. that caused trade disruption and price volatility in coming years. In late 2013, China began rejecting shipments of U.S. DDG after finding the presence of MIR 162, causing prices to fall to the lowest levels in two years.

While not bad news, China announced on Dec. 22, 2014, it had formally approved imports of corn and DDG with the MIR 162 trait, continuing with its tradition of springing huge news right before Christmas.

On the other hand, if China does not add the import duty on DDG, that announcement could open up more buying from Chinese buyers, which could raise DDG prices, though it likely would not be by a huge amount.

The value of DDG relative to corn this week was at about 90.55%, down slightly from last week's 92.26%, and 94.10% two weeks ago. The value of DDG value relative to soybean meal was about 44.49%, slightly higher than last week's value of 42.49%.

The cost per unit of protein for DDG was $4.88 this week, compared to the cost per unit of protein for soybean meal at $5.77.

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

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IN THE NEWS

U.S. Grains Council Consults with Saudi Arabian Grain Buyers

A recent trip to Saudi Arabia gave members of the U.S. Grains Council an opportunity to educate Saudi grain buyers on the value of dried distillers grains with solubles as a nutritious and low-cost feed ingredient.

According to an article by the USGC (http://bit.ly/…), Nabeel Salameh, the USGC's local consultant in Saudi Arabia, joined with Diaa Ghaly, director of business development at MIRASCO, and Sean Mulford, DDGS merchandiser at Agniel Commodities. The team met with representatives of eight Saudi feed manufacturers, processing facilities and dairy and poultry producers.

Since DDGS is underused in Saudi Arabia, even among those who have been importing it, the team focused on how to substitute DDGS for a part of the corn in livestock rations, lowering the price of the ration, while still maintaining nutritional content.

In 2011, DDGS was included on Saudi Arabia's subsidy list, which is critical for importers purchasing commodities. Since then, the council has worked to build confidence in U.S. DDGS and providing information to Saudi buyers regarding U.S. grains markets and handling systems, as well as feed formulations.

While corn imports in the Middle East and North Africa are facing competition from other markets such as Ukraine, Brazil and Argentina, U.S. DDGS are a benefit to Saudi buyers in that they are easily available and well-priced.

The council's long-term strategy is for more visits to Saudi Arabia to continue promoting corn co-products such as DDGS and corn gluten meal. The regional outreach program will continue in December with a trip to Egypt for consultations with local feed manufacturers and poultry producers.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 12/11/2015 12/4/2015 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 $125 $125 $0
Indiana Dry $125 $125 $0
Iowa Dry $118 $122 -$4
Michigan Dry $130 $128 $2
Minnesota Dry $110 $110 $0
North Dakota Dry $110 $110 $0
New York Dry $135 $135 $0
South Dakota Dry $110 $110 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $135 $135 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $124 $120 $4
Iowa Dry $112 $110 $2
Michigan Dry $125 $130 -$5
Minnesota Dry $105 $110 -$5
Missouri Dry $130 $130 $0
Ohio Dry $125 $125 $0
South Dakota Dry $113 $115 -$2
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $140 $140 $0
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $130 $130 $0
Indiana Dry $125 $125 $0
Iowa Dry $115 $115 $0
Michigan Dry $125 $125 $0
Minnesota Dry $115 $115 $0
Nebraska Dry $130 $125 $5
New York Dry $145 $145 $0
North Dakota Dry $130 $130 $0
Ohio Dry $125 $125 $0
South Dakota Dry $115 $115 $0
Wisconsin Dry $115 $114 $1
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $125 $125 $0
Iowa Dry $115 $110 $5
Minnesota Dry $110 $105 $5
Nebraska Dry $130 $125 $5
Ohio Dry $130 $135 -$5
South Dakota Dry $110 $108 $2
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $122 $122 $0
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 12/10/2015 $3.7725 $134.73
Soybean Meal 12/10/2015 $274.20
DDG Weekly Average Spot Price $122.00
DDG Value Relative to: 12/11 12/4 11/27
Corn 90.55% 92.26% 94.10%
Soybean Meal 44.49% 42.49% 43.19%
Cost Per Unit of Protein:
DDG $4.88 $4.92 $4.92
Soybean Meal $5.77 $6.04 $6.00
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 (Dec 4, 2015)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 110.00-128.00 50.00-60.00 34.00-42.00
Minnesota 110.00-120.00 55.00 32.00-40.00
Nebraska 120.00-143.00 60.00-71.00 47.00-54.00
South Dakota 107.00-120.50 60.00-68.50 36.00-40.00
Wisconsin 115.00-120.00 50.00-60.00 NQ
Eastern Corn Belt 118.00-155.00 55.00-60.00 NQ
Kansas 130.00-165.00 NQ 48.00-62.00
Northern Missouri 130.00-145.00 NQ 42.00-44.00
DELIVERED PRICES PER TON
CIF NOLA 154.00-160.00
Pacific Northwest 176.00-178.00
California 176.00-188.00
Texas Border (metric ton) 190.00-205.00
Lethbridge AB 154.00
Chicago 136.00-145.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Dec 8, 2015)

Distillers Dry Grains

  Rail to California Points          175.00-185.00  dn 5.00-up 2.00
  FOB Truck to California Points     178.00-186.00  unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Dec 8, 2015)

Offers for Distillers Dried Grains delivered in October by rail to feed mills in the Pacific Northwest were 2.00 to 3.00 lower from 180.00-183.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were 2.00 to 3.00 lower at 198.00.

*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

September 2015 - October 2015

Dec 1, 2015

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.95 million tons during October 2015, up 2 percent from September 2015 and up 5 percent from October 2014. Distillers wet grains (DWG) 65 percent or more moisture was 1.23 million tons in October 2015, up 5 percent from September 2015 but down 8 percent from October 2014.

Wet mill corn gluten feed production was 326.1 thousand tons during October 2015, up 4 percent from September 2015 and up 2 percent from October 2014. Wet corn gluten feed 40 to 60 percent moisture was 297.0 thousand tons in October 2015, up 4 percent from September 2015 but down 7 percent from October 2014.

Co-products and Products Oct 2014 Sept 2015 Oct 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 149,960 156,935 145,649
Corn oil 107,516 117,622 128,337
Distillers dried grains (DDG) 420,226 420,458 438,027
Distillers dried grains with solubles (DDGS) 1,856,472 1,907,470 1,953,850
Modified distillers wet grains (DWG) <65% moisture 1,333,264 1,165,422 1,226,333
Modified distillers wet grains (DWG) 40-64% moisture 413,040 369,209 386,299
Wet Mill
Corn germ meal 78,674 56,106 62,784
Corn gluten feed 320,692 312,543 326,055
Corn gluten meal 92,665 86,522 83,213
Corn oil 47,405 42,605 48,676
Wet corn gluten feed 40-60% moisture 320,919 286,615 296,954

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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.

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