DTN Weekly Distillers Grains Update

Corn, Soybean Meal Prices Continue to Lead DDG Prices

The direction of distillers dried grains prices in recent months has been dictated by the prices of corn and soybean meal. Both corn and soybean meal compete with DDG as a source of protein in livestock rations.

Prices of DDG followed an upward trend in corn and soybean meal prices between early April and mid-June. The DTN weekly spot price average rose a total of $48 per ton in that nine-week period, bringing DDG prices to the highest point since late May 2015. Then last week, the average suddenly took a downward turn, dropping $8 per ton in just one week. Not so coincidentally, corn and soybean meal prices dropped as well.

Thursday, merchandisers reported to DTN that DDG prices had fallen in many markets by $5 to $10 per ton. This pushed the DTN weekly spot price average down another $6 per ton, to $154.

Andy Lindsay, merchandiser for POET Nutrition in Sioux Falls, S.D., said, "Everything last week was based on what corn and soybean meal did."

Also factoring into the volatility to some degree was weather. Some areas were experiencing dry conditions, but some rains received in the last week or so seem to have improved the outlook on crops, Lindsay said.

Export demand in recent weeks has been fairly steady, Lindsay told DTN. Southeast Asian containers have been fairly steady. There has been some talk of bulk vessels going to China, as well as some containers; however, there are some indications that may drop off by the end of July.

Markets still seem to be hesitant, awaiting the outcome of China's DDG anti-dumping and countervailing duties investigation. Lindsay said there is talk that China may announce something more toward September.

Domestic demand has also been fairly steady, except for the slight seasonal dip caused by recent extreme heat, he said; cattle simply do not eat as much during hot weather.

Supplies are loosening up after some tightness in May and June, he said. Demand in May left supplies a little short. Also, a bump in exports in May took some nearby supplies out of the market, Lindsay said.

In the coming weeks, Lindsay said he expects DDG prices may remain flat or trend a little lower in August, depending on factors like exports, weather, etc. He added that DDG prices will largely depend on corn and soybean meal price trends.

Livestock producers looking to buy DDG may want to just buy hand-to-mouth until everyone sees where the markets go.

"I wouldn't go crazy," Lindsay said. "There may be a little better buys in August."

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

Follow Cheryl Anderson on Twitter @CherylADTN

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NEWS IN BRIEF

Demand for Kosher Distillers Corn Oil Could Increase Market for Glycerin

Corn oil derived from distillers grains supplies almost a fifth of the U.S. biodiesel feedstock market and is increasing the amount of glycerin produced. But unless the distillers corn oil (DCO) produced during ethanol production is kosher, opportunities for the resulting glycerin in food markets may be limited, according to an article in Biodiesel Magazine (http://bit.ly/…).

The definition of kosher comes from laws from the Torah in the Old Testament and dictates what foods can or cannot be eaten according to Jewish law, as well as how they must be prepared.

Rabbi Abraham Juravel, the rabbinic coordinator of technical services for the Orthodox Union, spoke recently at the National Advanced Biofuels Conference & Expo in Milwaukee about the importance of certifying glycerin as kosher to expand market opportunities.

Glycerin is a food additive used in a wide variety of products. While crude vegetable oil is kosher, the refining process many times are not. The problem is that some plants refine both animal fats and vegetable oil, and there are no animal fats or edible tallows on the market that are kosher, Juravel said.

Many big companies -- including Proctor & Gamble, Cargill and Archer Daniels Midland -- produce kosher glycerin.

Juravel suggested that ethanol producers extracting DCO for biodiesel consider what demulsifiers they use in the extraction process, as some demulsifiers (which separate the oil from the distillers grains) come from animals or vegetables. He added there are several companies that produce demulsifiers that are kosher.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 7/1/2016 6/24/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $175 -$5
Modified $70 $75 -$5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $170 $170 $0
Indiana Dry $165 $170 -$5
Iowa Dry $165 $165 $0
Michigan Dry $165 $170 -$5
Minnesota Dry $140 $140 $0
North Dakota Dry $130 $140 -$10
New York Dry $165 $165 $0
South Dakota Dry $130 $140 -$10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $145 $150 -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $175 -$10
Iowa Dry $155 $158 -$3
Michigan Dry $160 $160 $0
Minnesota Dry $152 $155 -$3
Missouri Dry $170 $173 -$3
Ohio Dry $170 $175 -$5
South Dakota Dry $150 $155 -$5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $135 $135 $0
Wet $40 $40 $0
Illinois Dry $170 $180 -$10
Nebraska Dry $135 $135 $0
Wet $40 $40 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $175 $175 $0
Indiana Dry $175 $175 $0
Iowa Dry $155 $165 -$10
Michigan Dry $160 $165 -$5
Minnesota Dry $145 $155 -$10
Nebraska Dry $135 $145 -$10
New York Dry $165 $170 -$5
North Dakota Dry $145 $155 -$10
Ohio Dry $160 $170 -$10
South Dakota Dry $135 $150 -$15
Wisconsin Dry $160 $165 -$5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $160 $170 -$10
Iowa Dry $150 $155 -$5
Minnesota Dry $145 $150 -$5
Nebraska Dry $150 $160 -$10
Ohio Dry $165 $170 -$5
South Dakota Dry $140 $145 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $205 $220 -$15
*Prices listed per ton.
Weekly Average $154 $160 -$6
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 6/30/2016 $3.5875 $128.13
Soybean Meal 6/30/2016 $405.30
DDG Weekly Average Spot Price $154.00
DDG Value Relative to: 6/24 6/24 6/17
Corn 120.20% 115.69% 110.62%
Soybean Meal 38.00% 41.75% 42.24%
Cost Per Unit of Protein:
DDG $6.16 $6.40 $6.72
Soybean Meal $8.53 $8.07 $8.37
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 (June 24, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 165.00-170.00 56.00-80.00 35.00-47.00
Minnesota 145.00-170.00 65.00 32.00-65.00
Nebraska 148.00-170.00 57.00-80.00 41.00-61.00
South Dakota 145.00-153.00 65.00-72.00 37.00-40.00
Wisconsin 144.00-180.00 75.00-90.00 NQ
Eastern Corn Belt 165.00-192.00 65.00-85.00 NQ
Kansas 160.00-182.00 NQ 45.00-60.00
Northern Missouri 170.00-191.00 82.00 46.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 185.00-215.00
Pacific Northwest 197.00-213.00
California 195.00-210.00
Texas Border (metric ton) 220.00-235.00
Lethbridge AB 165.00
Chicago 170.00-185.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue June 28, 2016)

Distillers Dry Grains

  Rail to California Points              NA
  FOB Truck to California Points     Ltd 205.00           dn 15.00-43.00

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue June 28, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were 3.00 to 23.00 lower from 192.00-222.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also 3.00 to 23.00 lower from 210.00-237.00.

*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

March 2016 - April 2016

June 1, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.70 million tons during April 2016, down 11 percent from March 2016 but up 2 percent from April 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.26 million tons in April 2016, down 4 percent from March 2016 and down 5 percent from April 2015.

Wet mill corn gluten feed production was 306 thousand tons during April 2016, down 11 percent from March 2016 and down 2 percent from April 2015. Wet corn gluten feed 40 to 60 percent moisture was 301 thousand tons in April 2016, up 4 percent from March 2016 but down 4 percent from April 2015.

Co-products and Products Apr 2015 Mar 2016 Apr 2016
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 140,171 137,396 130,324
Corn oil 101,614 125,510 110,439
Distillers dried grains (DDG) 411,664 384,739 374,750
Distillers dried grains with solubles (DDGS) 1,663,380 1,919,507 1,701,500
Modified distillers wet grains (DWG) <65% moisture 1,327,808 1,320,322 1,264,745
Modified distillers wet grains (DWG) 40-64% moisture 387,155 456,256 426,558
Wet Mill
Corn germ meal 61,922 68,140 67,530
Corn gluten feed 313,889 342,668 306,464
Corn gluten meal 89,356 91,945 84,916
Corn oil 42,998 51,415 51,455
Wet corn gluten feed 40-60% moisture 314,047 290,565 301,283

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DDG LINKS/RESOURCES

National Organizations:

Distillers Grains Technology Council (www.distillersgrains.org)

Renewable Fuels Association (www.ethanolrfa.org)

U.S. Grains Council (www.grains.org)

National Corn Growers Association (www.ngfa.org)

American Feed Industry Association (www.afia.org)

Government/Regulatory:

National Grains and Feed Association (www.ngfa.org)

Association of American Feed Control Officials (www.aafco.org)

USDA Animal Feed Safety System (http://1.usa.gov/…)

USDA Food Safety Modernization Act (http://1.usa.gov/…)

University Websites:

Corn Processing Coproducts Manual, Nebraska Corn Board and Nebraska Corn Board and the University of Nebraska-Lincoln Institute of Agriculture and Natural Resources Agricultural Research Division Cooperative Extension Division (http://bit.ly/…)

University of Minnesota Biofuels Coproducts in Animal Feed (www.biofuelscoproducts.umn.edu)

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DDG CONFERENCES

*Distillers Grains Technology Council Inc.'s 21th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 21st Annual Distillers Grains Symposium on May 17-18, 2017 at the downtown Marriott in Indianapolis, IN. 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.

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