DTN Weekly Distillers Grains Update

Winter Storms Jam Up DDG Logistics

The snow and blizzard-like conditions that plagued much of the Midwest caused headaches early this week for ethanol plants trying to send out loads of dried distillers grains.

According to Kent Hansen, merchandiser for Heartland-Frontier Trading Company in Wichita, Kan., logistics were a challenge when most ethanol-producing states received 8 inches to 13 inches of heavy, wet snow.

"Some plants couldn't load for a day or two and others that could were overwhelmed with trucks and ran out of inventory," he said. "Hopefully next week things will level out and run a lot smoother."

Some merchandisers have reported some tightness in supplies of DDG in recent weeks. With poor ethanol margins at present, some plants have chosen to slow down production of ethanol, thereby lowering the amount of DDG produced as well.

Hansen said that while supplies remain tight, they seem to be adequate for demand. However, sales for spring months are not expected to be ample.

"There's not much demand out forward for sales of DDG," he said. "The market shows an inverse for April on forward."

The ample moisture and snow received this winter is hindering sales, Hansen said. "As we get closer to spring, and with all the moisture in all parts of the country, there will be a lot of grass. With the beef and dairy economics as they are no one is interested in buying forward."

Prices of DDG remain steady currently, he said.

The DTN weekly DDG spot price average remained unchanged at $130 per ton in the past week. Most locations reported their spot prices either unchanged or with only slight $1 to $2 adjustments lower.

This is still the highest point the average has reached since the first week of September.

Merchandisers told DTN the market has been very slow and quiet in the past week. Some sellers reported not having much product to sell, at least in the nearby.

Exports are slow, but steady, but with the announcement of China's anti-dumping investigation into U.S. DDG exports, some sellers are wary of exporting there, considering the long history of trade disruptions with China.

"China is still a toss-up as to whether they are a viable buyer," Hansen said. "New requirements make it more of a risk to sell to them as we move forward. Producers don't get too long until we see what spring brings."

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

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IN THE NEWS

ChemChina Offers $43 Billion to Buy Out Syngenta

Beijing-based chemical giant China National Chemical Corp. (ChemChina) has offered to purchase U.S. chemical company Syngenta for $43 billion, according to DTN\Progressive Farmer Crops Technology Editor Pam Smith (http://bit.ly/…).

Syngenta announced Wednesday its board will recommend that shareholders accept the cash offer from ChemChina, after turning down a bid from rival U.S. chemical company Monsanto in 2015. The proposed sale will still need to undergo scrutiny by shareholders and regulatory agencies, Smith reported.

The irony of the offer stems from China's ban on imports of corn and dried distillers grains containing the Agrisure Viptera (MIR 162) biotech trait in 2014. The MIR 162 trait is produced by Syngenta.

The lengthy trade disruptions began in mid-December 2013 when China began rejecting shipments of U.S. DDG because of the presence of MIR 162, which it had not yet approved. Prices of DDG began to plummet, but fell even more in June when China announced it would stop issuing permits for imports of DDGS. In July, China demanded that any DDGS arriving in Chinese ports be accompanied by an official letter of certification that it contains no trace of MIR 162. The U.S. did not comply as no such certification exists.

Rumors that China had approved the trait began in early December 2014, then Syngenta released a statement on Dec. 22 that it had received the safety certificate for its MIR 162 trait from Chinese authorities, formally granting approval for imports of corn and DDG with the trait.

The rumors and subsequent approval of the trait led to a sharp rally in DDG prices in late December and into January 2015, and the value of DDG relative to corn rose to as much as 135%. The DTN weekly DDG spot price average increased nearly $76 per ton in the 11 weeks leading up to the first week in January 2015.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 2/5/2016 1/29/2016 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 $145 $145 $0
Indiana Dry $135 $130 $5
Iowa Dry $125 $125 $0
Michigan Dry $135 $135 $0
Minnesota Dry $115 $115 $0
North Dakota Dry $125 $125 $0
New York Dry $165 $160 $5
South Dakota Dry $130 $125 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $140 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $135 $138 -$3
Iowa Dry $125 $125 $0
Michigan Dry $126 $128 -$2
Minnesota Dry $120 $121 -$1
Missouri Dry $140 $141 -$1
Ohio Dry $136 $136 $0
South Dakota Dry $120 $120 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $145 $145 $0
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $140 $0
Indiana Dry $135 $135 $0
Iowa Dry $120 $120 $0
Michigan Dry $135 $135 $0
Minnesota Dry $120 $120 $0
Nebraska Dry $130 $135 -$5
New York Dry $150 $150 $0
North Dakota Dry $130 $130 $0
Ohio Dry $137 $137 $0
South Dakota Dry $125 $125 $0
Wisconsin Dry $125 $125 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $130 $130 $0
Iowa Dry $125 $125 $0
Minnesota Dry $120 $120 $0
Nebraska Dry $130 $135 -$5
Ohio Dry $140 $140 $0
South Dakota Dry $115 $115 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $130 $130 $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 2/4/2016 $3.6850 $131.61
Soybean Meal 2/4/2016 $267.60
DDG Weekly Average Spot Price $130.00
DDG Value Relative to: 2/5 1/29 1/22
Corn 98.78% 99.59% 96.89%
Soybean Meal 48.58% 48.71% 46.66%
Cost Per Unit of Protein:
DDG $5.20 $5.20 $5.08
Soybean Meal $5.63 $5.62 $5.73
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 (Jan. 29, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 115.00-127.00 50.00-65.00 37.00-40.00
Minnesota 115.00-125.00 60.00 33.00-40.00
Nebraska 125.00-145.00 58.00-80.00 49.00-55.00
South Dakota 115.00-130.00 62.00-68.50 34.00-40.00
Wisconsin 117.00-125.00 51.00-55.00 NQ
Eastern Corn Belt 130.00-140.00 62.00-67.00 NQ
Kansas 140.00-158.00 NQ 47.00-65.00
Northern Missouri 135.00-150.00 NQ 44.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 155.00-164.00
Pacific Northwest 175.00-182.00
California 174.00-185.00
Texas Border (metric ton) 190.00-205.00
Lethbridge AB NA
Chicago 142.00-150.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Feb 2, 2016)

Distillers Dry Grains

  Rail to California Points         Ltd 195.00       up 10.00-unch
  FOB Truck to California Points    185.00-198.00    unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Feb 2, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were mixed, from 5.00 lower to 2.00 higher from 173.00-187.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were mixed, from 5.00 lower to 2.00 higher from 191.00-202.00.

*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

November 2015 - December 2015

Feb. 1, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.97 million tons during December 2015, up 2 percent from November 2015 and up 3 percent from December 2014. Distillers wet grains (DWG) 65 percent or more moisture was 1.27 million tons in December 2015, up 12 percent from November 2015 but down 10 percent from December 2014.

Wet mill corn gluten feed production was 340.5 thousand tons during December 2015, up 5 percent from November 2015 and up 3 percent from December 2014. Wet corn gluten feed 40 to 60 percent moisture was 307.9 thousand tons in December 2015, up 6 percent from November 2015 but down 9 percent from December 2014.

Co-products and Products Dec 2014 Nov 2015 Dec 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 172,082 124,855 134,196
Corn oil 97,380 130,938 131,811
Distillers dried grains (DDG) 448,551 413,019 423,632
Distillers dried grains with solubles (DDGS) 1,919,823 1,935,499 1,973,279
Modified distillers wet grains (DWG) <65% moisture 1,411,411 1,130,071 1,265,208
Modified distillers wet grains (DWG) 40-64% moisture 503,258 425,499 445,735
Wet Mill
Corn germ meal 75,031 67,645 69,669
Corn gluten feed 329,431 322,741 340,460
Corn gluten meal 94,777 84,505 88,921
Corn oil 44,551 53,597 57,578
Wet corn gluten feed 40-60% moisture 338,077 289,171 307,874

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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

*Distillers Grains Technology Council Inc.'s 20th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 20th Annual Distillers Grains Symposium on May 18-19, 2015 at the Hyatt Regency at The Arch in St. Louis, Missouri. For information, contact the DGTC office at (515) 294-4019 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, or e-mail cheryl.anderson@dtn.com.

(CZ/AG)