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

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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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