DTN Weekly Distillers Grains Update

Distillers Council Plans 20th Annual DDG Symposium

OMAHA (DTN) -- In celebration of its 20th annual Distillers Grains Symposium, the Distillers Grains Technology Council is planning an event that will "cover all the bases" in the latest trends, technology and challenges for ethanol/distillers producers. The symposium will be May 18 and 19 in St. Louis.

According to Kurt A. Rosentrater, executive director of the Distillers Grains Technology Council and associate professor at Iowa State University, the symposium will address topics vital to the beverage alcohol and fuel alcohol industries, both of which are continuing to evolve.

"A large component of success for both industries is finding value from the co-products. And so, this year, as in previous years, we are going to be providing the latest and greatest information that companies will find valuable in terms of production, sales and marketing of their co-products," Rosentrater said. "Hopefully, we will hit every aspect of distillers grains, from the raw grain kernels all the way through the animals. I think it will be very valuable for both industries."

One of the highlights of the symposium will be a number of speakers who will discuss sales and markets, both domestic and international.

"We tried to get some speakers focused on issues relevant to the co-product marketers. People who are attending from marketing and sales firms should find those presentations really informative," Rosentrater told DTN. "These will be the latest and greatest drivers to watch out for in the market place this year."

Speakers addressing market trends will be Michael Peterson from U.S. Commodities, Wes Swift from Platts, and Dr. Chad Hart from Iowa State University.

Rosentrater added that he believes several of the marketing presenters will discuss the current trade volatility with China.

Another major focus of the symposium will be new technologies, Rosentrater said.

"We're also going to have several presentations on new technologies and new processes coming in terms of fractionation and getting more value out of the kernel of corn," he said. We have several technology providers who will be giving presentations. That includes ICM, Cereal Process Technologies, etc.

The talks will include an overview of new trends and technologies by Dr. Harold Tilstra from Purina Animal Nutrition, as well as presentations on new processing technologies for ethanol plants by Peter Moss from Cereal Process Technologies and Dr. Jeremy Javers from ICM, Inc.

Rosentrater said that one exciting presentation will be by David Timmons from the Brown Forman Corporation, and Dr. Satyavolu, Dr. Michael Nantz and Dr. Christopher Burns, all from the University of Louisville.

"They will be talking about some new technologies for harvesting carbohydrates out of distillers grains that could revolutionize not just beverage distillers grains, but also fuel distillers grains.

Other presentations on new technologies will include:

-Increasing DDGS Nutritional Value with Beer Well Enzymes by Dr. Ernie Pierson from. Direvo

-DDGS Value Improvement with Enzymes -- In Ethanol Plants and Beyond by Dr. Milan Hruby from DuPont Industrial Biosciences.

-New Products from Corn Oil by Joe Riley of the Riley Resource Group.

As always, the symposium will contain several livestock-related talks, such as Dr. Alfredo Dicostanzao from the University of Minnesota who will discuss recent advances in beef nutrition with distillers grains. Dr. Alvaro Garcia from South Dakota State University will discuss new generation distillers grains for dairy cattle. Also, Dr. Stephanie Clark from ISU will give a presentation on "Impacts of Distillers Grains on Cheese Quality."

Rosentrater said he is excited that this year's symposium will again feature a new product panel.

"The majority of the new product panel will be focused on chemistry and additives to distillers grains," Rosentrater said. "Like last year, each speaker will have about five minutes to talk about their product, then we will open the floor up for questions from the audience."

The new product panel will include:

1. Backset -- Hidden Value by Mike Locascio, Renewable Fuels Consulting.

2. New Antimicrobials for the Ethanol Industry by Eric Sumner, Anitox.

3. Partnering with Ethanol Producers to Develop Process Aids Enabling Higher Quality and Value Feed Products by Jennifer Bailey, Solenis.

4. Antimicrobials that Can Address Both Gram Negative and Gram Positive Bacteria by Allen Ziegler, Hydrite.

5. Improving the Nutritional Value of DDGS Using Novel Enzymes in the First Generation Process by Dr. Mads Pedersen, Novozymes

6. New Chemistries for the Ethanol Industry by Cam Fowler, Phibro Ethanol Performance.

One of the most important talks, Rosentrater said, will be Dr. Marla Keller from the U.S. Food and Drug Administration who will talk about FDA regulation of animal food from the ethanol industry.

Rosentrater said this presentation is important for anyone involved in production or sales and marketing of distillers grains, since the Food Safety Modernization Act is now in place and companies are gearing up to implement the FSMA regulations.

Other talks on scientific and environmental topics will be:

-Understanding Laboratory Methods for Analysis of Distillers Grains for Quality Control in Production and Trade by Angela Carlson, SGS.

-Operational Advances and Environmental Impacts by Dr. Dennis Bayrock, Phibro Ethanol Performance.

This year's symposium will also include presentations of scholarship to the four graduate student scholarships, who will each give a short presentation on their research and will have posters on display.

Although the early bird deadline has passed, registration for the symposium is still open and available online on the Council's website (http://www.distillersgrains.org).

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

Follow Cheryl Anderson on Twitter @CherylADTN

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IN THE NEWS

China Announces Plan to Change Corn Policy

A recent announcement by China revealed a plan to modify its corn policy in order to use more market factors to set prices, as well as ending its corn stockpiling program, according to an article by the U.S. Grains Council (http://bit.ly/…). The Council detected signs that the reforms would be implemented through its careful monitoring.

According to Bryan Lohmar, the Council's director in China, the Chinese government stockpiling program was a very expensive policy to have in place.

"It is costing China a lot of money to store the grain; it's difficult to keep the grain in condition; and China was also losing money by buying corn at a high price when world corn prices were low," Lohmar said.

In addition to the expenses involved, the stockpiling policy was causing a number of environmental concerns. Chinese officials cited concerns over farmers growing corn year-after-year on the same land and using large amounts of nitrogen fertilizers.

China's glut of corn stocks is believed by many in the ethanol industry to be the motivation behind the country's on-going DDGS anti-dumping and countervailing duties investigation. Some experts claim that China's trade antics in recent years were an attempt to force Chinese buyers to use up the stockpiles of corn, much of which was rumored to be in poor condition.

Lohmar added, "While China has not announced what is going to replace the price support program, it would not surprise me if there was some conservation-type criteria included in the new policy."

The new policy may cause some disruption and uncertainty in the market about how the change will affect exports to China. However, Lohmar said he thinks it will be beneficial for global grain markets.

"Over the long term, a market-oriented feed industry in China is best for everybody," he said in the newsletter.A recent announcement by China revealed a plan to modify its corn policy in order to use more market factors to set prices, as well as ending its corn stockpiling program, according to an article by the U.S. Grains Council (http://bit.ly/…). The Council detected signs that the reforms would be implemented through its careful monitoring.

According to Bryan Lohmar, the Council's director in China, the Chinese government stockpiling program was a very expensive policy to have in place.

"It is costing China a lot of money to store the grain; it's difficult to keep the grain in condition; and China was also losing money by buying corn at a high price when world corn prices were low," Lohmar said.

In addition to the expenses involved, the stockpiling policy was causing a number of environmental concerns. Chinese officials cited concerns over farmers growing corn year-after-year on the same land and using large amounts of nitrogen fertilizers.

China's glut of corn stocks is believed by many in the ethanol industry to be the motivation behind the country's on-going DDGS anti-dumping and countervailing duties investigation. Some experts claim that China's trade antics in recent years were an attempt to force Chinese buyers to use up the stockpiles of corn, much of which was rumored to be in poor condition.

Lohmar added, "While China has not announced what is going to replace the price support program, it would not surprise me if there was some conservation-type criteria included in the new policy."

The new policy may cause some disruption and uncertainty in the market about how the change will affect exports to China. However, Lohmar said he thinks it will be beneficial for global grain markets.

"Over the long term, a market-oriented feed industry in China is best for everybody," he said in the newsletter.

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 4/8/2016 4/1/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $130 $135 -$5
Modified $63 $65 -$2
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $120 $123 -$3
Indiana Dry $115 $118 -$3
Iowa Dry $110 $115 -$5
Michigan Dry $118 $120 -$2
Minnesota Dry $105 $105 $0
North Dakota Dry $110 $110 $0
New York Dry $120 $125 -$5
South Dakota Dry $110 $110 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $125 $125 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $116 $117 -$1
Iowa Dry $111 $114 -$3
Michigan Dry $110 $118 -$8
Minnesota Dry $110 $115 -$5
Missouri Dry $129 $130 -$1
Ohio Dry $118 $119 -$1
South Dakota Dry $115 $117 -$2
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $127 $127 $0
Wet $50 $50 $0
Illinois Dry $133 $133 $0
Nebraska Dry $127 $127 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $117 $117 $0
Indiana Dry $115 $120 -$5
Iowa Dry $110 $110 $0
Michigan Dry $118 $120 -$2
Minnesota Dry $105 $110 -$5
Nebraska Dry $120 $120 $0
New York Dry $125 $125 $0
North Dakota Dry $115 $115 $0
Ohio Dry $118 $118 $0
South Dakota Dry $110 $110 $0
Wisconsin Dry $115 $115 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $108 $118 -$10
Iowa Dry $110 $115 -$5
Minnesota Dry $107 $112 -$5
Nebraska Dry $120 $122 -$2
Ohio Dry $115 $122 -$7
South Dakota Dry $105 $108 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $178 $180 -$2
*Prices listed per ton.
Weekly Average $116 $118 -$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 4/7/2016 $3.6150 $129.11
Soybean Meal 4/7/2016 $266.80
DDG Weekly Average Spot Price $116.00
DDG Value Relative to: 4/8 4/1 3/25
Corn 89.85% 93.33% 92.32%
Soybean Meal 43.48% 43.33% 44.32%
Cost Per Unit of Protein:
DDG $4.64 $4.72 $4.88
Soybean Meal $5.62 $5.73 $5.80
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 (Apr 1, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 115.00-125.00 51.00-65.00 38.00-40.00
Minnesota 110.00-120.00 55.00 36.00-40.00
Nebraska 122.00-140.00 58.00-70.00 49.00-54.00
South Dakota 113.00-128.00 59.00-69.00 40.00-44.00
Wisconsin 115.00-130.00 50.00-60.00 NQ
Eastern Corn Belt 118.00-134.00 60.00-65.00 NQ
Kansas 130.00-153.00 NQ 45.00-56.00
Northern Missouri 134.00-139.00 NQ 41.00-53.00
DELIVERED PRICES PER TON
CIF NOLA 143.00-152.00
Pacific Northwest 164.00-171.00
California 167.00-177.00
Texas Border (metric ton) 180.00-195.00
Lethbridge AB 148.00
Chicago 128.00-135.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Apr 5, 2016)

Distillers Dry Grains

  Rail to California Points         168.00-180.00    dn 12.00-6.00
  FOB Truck to California Points    173.00-191.00    dn 15.00-5.00

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Apr 5, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were 8.00 to 10.00 lower from 170.00-180.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were 8.00 to 10.00 lower from 188.00-195.00.

*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

January 2016 - February 2016

April 1, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.80 million tons during February 2016, down 4 percent from January 2016 but up 11 percent from February 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.25 million tons in February 2016, down 5 percent from January 2016 and down 2 percent from February 2015.

Wet mill corn gluten feed production was 312.0 thousand tons during February 2016, down 3 percent from January 2016 but up 10 percent from February 2015. Wet corn gluten feed 40 to 60 percent moisture was 277.4 thousand tons in February 2016, down 5 percent from January 2016 but up 1 percent from February 2015.

Co-products and Products Jan 2015 Dec 2015 Jan 2016
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 128,0271 133,919 122,291
Corn oil 95,268 124,541 123,806
Distillers dried grains (DDG) 405,025 383,131 367,436
Distillers dried grains with solubles (DDGS) 1,622,467 1,869,722 1,795,472
Modified distillers wet grains (DWG) <65% moisture 1,268,244 1,311,155 1,247,751
Modified distillers wet grains (DWG) 40-64% moisture 418,698 449,256 401,370
Wet Mill
Corn germ meal 48,546 63,787 65,123
Corn gluten feed 283,990 321,956 312,012
Corn gluten meal 80,955 87,266 83,643
Corn oil 41,020 445,976 46,490
Wet corn gluten feed 40-60% moisture 274,763 291,882 277,434

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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, 2016 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)