DTN Weekly Distillers Grains Update

RFA Hopeful for Response From China in Anti-Dumping Investigation

OMAHA (DTN) -- Chinese trade officials have not yet responded to contact from the Obama administration expressing concern over the country's anti-dumping and countervailing duties investigation on exports of U.S. dried distillers grains with solubles to that country. However, the Renewable Fuels Administration remains hopeful that China will respond.

The People's Republic of China announced on Jan. 12 it had initiated anti-dumping and countervailing duty investigations to study whether U.S. agricultural policies, mainly agricultural subsidies, in some way create unfair competition.

China's Ministry of Commerce (MOC) requested U.S. industry participants complete a lengthy and complex preliminary questionnaire within a two-week period. Approximately 20 U.S. companies filed individual responses to the questionnaire and another 50 to 60 companies filed a joint response.

Bob Dinneen, RFA president and CEO, said Chinese officials selected only three U.S. companies that filed the individual responses: Archer-Daniels-Midland Company, Big River Resources LLC and Marquis Energy LLC have been chosen for sampling as part of the anti-dumping investigation.

The sampling involves a lengthy, time-consuming questionnaire that must be filled out and returned within about 30 days.

Tom Sleight, president and chief executive officer of the U.S. Grains Council said, "The questionnaire is very, very extensive. It's quite the undertaking for a company to comply."

China determined that the 50 to 60 other companies included on the joint response were found to be non-cooperative, a designation that typically calls for the highest duties.

Last week, in response to China's issuance of the preliminary sampling results and related issues pursuant to the anti-dumping and countervailing duty cases against the U.S. distiller's dried grains (DDG) industry, Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, and Tom Buis, chief executive officer of Growth Energy, sent a letter to President Barack Obama urging his administration to take swift action to "mount an aggressive defense of our access to the Chinese livestock feed market."

The letter asked President Obama to launch a complaint with the World Trade Organization against China's investigation, claiming it has hurt U.S. ethanol producers, and that the uncertainty and market risk resulting from China's actions have triggered substantial financial losses for U.S. DDGS producers. Prices of DDGS have plunged more than 25% since last summer, while prices of competing feedstuffs have remained stable or increased slightly.

DDGS have already lost $30 to $50 per ton in value (equivalent to an annualized aggregate loss of $1.2 billion to $1.6 billion to U.S. ethanol producers); Dinneen and Buis said the losses could reach as high as $50 to $60 per ton or more if the investigation results in a total collapse of DDGS exports to China.

China has been a vital DDGS export market in recent years. According to statistics from the USDA's Foreign Agricultural Service, 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.

In their letter, Dinneen and Buis also asked the president to direct the Office of the U.S. Trade Representative, the Department of Commerce and the Department of Agriculture to challenge the process and preliminary determinations made through comments to the MOC through the WTO, as well as requesting the president work closely with the U.S. DDGS industry to mount an aggressive defense of U.S. access to the Chinese livestock feed market throughout the investigation.

In less than a week, the office of the United States Trade Representative (USTR) as well as the Department of Commerce contacted the appropriate Chinese officials, expressing their concern over the process and sampling methodology utilized in selecting U.S. companies for participation in the anti-dumping and countervailing duty cases.

Following the decisive response by the administration, Growth Energy and RFA praised the administration for action to defend the U.S. DDG industry.

Buis noted, "I would like to commend President Obama and his administration for taking immediate action to protect the U.S distiller's grains industry. The simple fact is that there is no reason the People's Republic of China should file a case like this -- it is counterproductive, disrupts trade and produces uncertainty throughout the domestic ethanol industry. Growth Energy and its members are grateful for the position this administration has taken to ensure that unnecessary trade restrictions such as this anti-dumping and countervailing duty case are resolved as quickly as possible."

"I congratulate and appreciate the administration for getting involved in this crucial issue," said Dinneen. "I am glad both the United States Trade Representative and the Department of Commerce are recognizing the urgent need to address our concerns. I look forward to a quick resolution of these cases and returning to fair trade of the U.S. distillers dried grains industry.

"It is very frustrating and we are eager to hear from the Chinese. We will continue to stay on this issue until it is resolved," Dinneen said.

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

Follow Cheryl Anderson on Twitter @CherylADTN

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IN THE NEWS

Iowa Corn Board to Promote Corn, DDG Exports

A grassroots movement by the Iowa Corn Promotion Board is aimed at increasing the promotion of Iowa corn and corn co-products such as DDG, according to an article by Iowa Farmer Today (http://bit.ly/…).

In order to increases the number of farmers involved, the Board now has district advisory groups and more members involved in state committees.

One of the ways the Board spends its 1-cent-per-bushel checkoff money is to promoting corn exports as a way of creating demand. The promotion involves corn exports in all formers, including raw corn, ethanol, and distillers grains.

In order to further promote exports of corn and corn co-product, the Board is a member of both the U.S. Grains Council and the U.S. Meat Export Federation. The Board also works with corn groups such as the National Corn Growers Association to help leverage their investment, as well as with other farm groups.

According to Board Chairman Chris Edgington, other checkoff money is used on research for finding more uses for corn, improving the corn plant for production and funding genomic and phenotyping research.

Exports of DDG set a new record in 2015, according to statistics released recently by the Renewable Fuels Association. The record of 12.56 million metric tons shipped to 45 countries on five continents is 11% higher than 2014 exports and more than double the total exports in 2009.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 3/11/2016 3/4/2016 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 $138 $145 -$7
Indiana Dry $135 $137 -$2
Iowa Dry $128 $130 -$2
Michigan Dry $135 $135 $0
Minnesota Dry $118 $118 $0
North Dakota Dry $122 $125 -$3
New York Dry $138 $140 -$2
South Dakota Dry $122 $125 -$3
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $135 $135 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $132 $132 $0
Iowa Dry $122 $122 $0
Michigan Dry $128 $130 -$2
Minnesota Dry $118 $118 $0
Missouri Dry $140 $142 -$2
Ohio Dry $128 $130 -$2
South Dakota Dry $120 $120 $0
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 $140 -$10
Indiana Dry $125 $130 -$5
Iowa Dry $120 $120 $0
Michigan Dry $130 $130 $0
Minnesota Dry $115 $115 $0
Nebraska Dry $125 $130 -$5
New York Dry $150 $155 -$5
North Dakota Dry $120 $125 -$5
Ohio Dry $128 $135 -$7
South Dakota Dry $120 $120 $0
Wisconsin Dry $120 $125 -$5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $128 $130 -$2
Iowa Dry $120 $125 -$5
Minnesota Dry $116 $120 -$4
Nebraska Dry $130 $130 $0
Ohio Dry $135 $140 -$5
South Dakota Dry $112 $115 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $190 $190 $0
*Prices listed per ton.
Weekly Average $127 $129 -$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 3/10/2016 $3.6250 $129.46
Soybean Meal 3/10/2016 $270.20
DDG Weekly Average Spot Price $127.00
DDG Value Relative to: 3/11 3/4 2/26
Corn 98.10% 102.11% 102.68%
Soybean Meal 47.00% 49.24% 50.54%
Cost Per Unit of Protein:
DDG $5.08 $5.16 $5.20
Soybean Meal $5.69 $5.52 $5.41
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 4, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 120.00-135.00 55.00-65.00 35.00-41.00
Minnesota 120.00-125.00 55.00 38.00-45.00
Nebraska 125.00-138.00 60.00-78.00 48.00-55.00
South Dakota 115.00-128.00 62.00-67.00 36.00-42.00
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 135.00-150.00 NQ 42.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 159.00-164.00
Pacific Northwest 176.00-186.00
California 179.00-190.00
Texas Border (metric ton) 195.00-210.00
Lethbridge AB 155.00
Chicago 142.00-145.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Mar 8, 2016)

Distillers Dry Grains

  Rail to California Points          180.00-186.00    dn 5.00-9.00
  FOB Truck to California Points     185.00-191.00    unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Mar 8, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were steady to 4.00 lower from 180.00-190.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 4.00 lower 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

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.

(AG/CZ)